Fair play to Iceland

ICELAND is a small country. It has a population of just over 300,000 and a landmass of a mere 103,000 square kilometres.
It is on the periphery of Europe geographically, economically and politically.
In October 2008, one of the country’s largest banks, Icesave, collapsed. The bank held a large amount of British and Dutch deposits.
In response to the collapse, British Prime Minister Gordon Brown’s government used anti-terrorist legislation to freeze Icelandic assets held by British banks. He and his Dutch counterpart also threatened to block Iceland’s EU membership bid unless the matter was resolved to their satisfaction.
The ensuing diplomatic wrangle led to a deal in June 2009 in which the Icelandic Government agreed to pay €3.8 billion of taxpayers’ money in compensation to the British and Dutch depositors.
While the compensation would be paid over a 15-year period, it would amount to a staggering contribution of €45,000 per household.
Unfortunately for the Icelandic Government and their ‘partners’ in London and The Hague, the ordinary people of this small European country had a different idea.
Some 56,000 Icelanders, a quarter of the country’s voters, signed a petition calling on the president not to sign the legislation giving effect to the massive state pay-out. Opinion polls suggested that 70% of voters were against the deal.
On 2 January, the day he received the petition, Icelandic President Olafur Rangar Grimsson refused to sign the legislation and announced that he would put the matter to a referendum.
The view of the Icelandic people was simple: why should ordinary taxpayers and working families pay for the mistakes of bankers and politicians?
The response from London and The Hague was immediate.
Not only did they again threaten to block Iceland’s EU membership bid but they also said they may obstruct the country’s $10 billion rescue package from the International Monetary Fund.
But the people of Iceland have secured the support of debt justice campaigners in England and the Netherlands.
The London-based Jubilee Debt Campaign has said that states in debt should put the interests of their citizens first. They also said that both the British and Dutch governments share part of the blame for failing to regulate the international banking system.
Nobody knows how this story will end. Iceland will come under immense pressure from Britain, the Netherlands, the international financial markets and even the IMF. How long President Rangar Grimsson will be able to withstand this pressure is anybody’s guess.
Even if the voters reject the deal in a referendum by a massive majority, the compensation scheme may still go ahead.
Despite all of this, ordinary Icelanders decided to make a stand and fair play to them. By demanding that the bankers and politicians responsible for the country’s financial crisis pay for their own mistakes, the people of Iceland have struck a blow for ordinary citizens all over the world.
If only the voters of every country had such courage.