{"id":989,"date":"2016-01-05T14:40:43","date_gmt":"2016-01-05T14:40:43","guid":{"rendered":"http:\/\/republicirelandbank.com\/?p=989"},"modified":"2016-01-05T14:55:02","modified_gmt":"2016-01-05T14:55:02","slug":"iceland-did-things-differently-and","status":"publish","type":"post","link":"https:\/\/republicirelandbank.com\/?p=989","title":{"rendered":"Iceland Did Things Differently and …"},"content":{"rendered":"\n\n\n
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Iceland Jailed Bankers and Rejected Austerity\u2014and It\u2019s Been a Success<\/h2>\n

Posted on Jun\u00a011,\u00a02015<\/p>\n

By\u00a0Roisin Davis<\/a>\u00a0 TruthDig.com\u00a0<\/a><\/p>\n

\"Iceland<\/a><\/p>\n

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Iceland’s unemployment rate of less than 4% is 40% of that of Ireland, even though we have JobBridge or as it is called by some ScamBridge.<\/a><\/p>\n

Click on Graph to enlarge:<\/p>\n

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Now, less than a decade later, the nation\u2019s economy is booming.<\/strong> And this year it will become the first culturally European country that faced collapse to beat its pre-crisis peak of economic output.When the global economic crisis hit in 2008, Iceland suffered terribly\u2014perhaps more than any other country. The savings of 50,000 people were wiped out, plunging Icelanders into debt and placing 25 percent of its homeowners in mortgage default.<\/p>\n

That\u2019s because it took a different approach. Instead of imposing devastating austerity measures and bailing out its banks, Iceland let its banks go bust and focused on social welfare policies. In March, the International Monetary Fund announced that the country had achieved economic recovery \u201cwithout compromising its welfare model\u201d of universal health care and education.<\/strong><\/p>\n

Iceland allowed those responsible for the crisis\u2014its bankers\u2014to be prosecuted as criminals. Again, a sharp contrast to the United States and elsewhere in Europe, where CEOs escaped punishment.<\/p>\n

\u201cWhy should we have a part of our society that is not being policed or without responsibility?\u201d asked special prosecutor Olafur Hauksson in the wake of the collapse. \u201cIt is dangerous that someone is too big to investigate\u2014it gives a sense there is a safe haven.\u201d<\/h3>\n

By refusing to allow its currency, the krona, to suffer ultra-low inflation to protect the assets of the rich\u2014as in the rest of the West\u2014Iceland let the krona tumble. The resulting inflation and higher prices have helped its export industries, unlike what happened in many European Union countries, which are contending with ongoing deflation.<\/p>\n

On Monday, Iceland\u2019s Finance Minister Bjarni Benediktsson announced the introduction of a 39 percent tax on creditors seeking to reclaim assets from the country\u2019s failed banks. As The Guardian explains, this is \u201can attempt to prevent foreign investors rushing en masse to withdraw billions currently frozen in Iceland\u2019s financial system.\u201d<\/p>\n

This tax has been introduced as the country winds down capital controls imposed in response to the crisis. Again flouting free market orthodoxy, this move restricts Icelanders\u2019 ability to move their money out of the country in order to protect the krona. Initially intended to expire after six months, the controls have been in place for more than six years.<\/p>\n

As a result, it\u2019s estimated that about 1,200 billion Icelandic krona have been frozen\u2014the equivalent of $9 billion. If capital controls were removed, Iceland could face a spate of bankruptcies and problems with liquidity. \u201cThere is not sufficient foreign currency to release 1,200bn [krona] in foreign currency,\u201d The Guardian quoted Benedikt G\u00edslason, an adviser to the government, as saying. \u201cThe Icelandic economy would not survive.\u201d<\/p>\n

All of these actions have, unsurprisingly, drawn the ire of other countries\u2014in ideological and measurable ways. By refusing to honor bank guarantees given by British and Dutch investors in Icesave\u2014a subsidiary of one of Iceland\u2019s main banks, Landsbanki\u2014Iceland created enemies of its European neighbors. But it has now repaid 85 percent of U.K. claims, and the Icelandic finance minister announced recently that all will be settled by the end of the year.<\/p>\n

When asked why Iceland was enjoying such a strong recovery while everyone else is still mired in debt, President Olafur Ragnar Grimmson said in 2013:<\/p>\n

\u201cWhy are the banks considered to be the holy churches of the modern economy? Why are private banks not like airlines and telecommunication companies and allowed to go bankrupt if they have been run in an irresponsible way? The theory that you have to bail out banks is a theory that you allow bankers enjoy for their own profit, their success, and then let ordinary people bear their failure through taxes and austerity. People in enlightened democracies are not going to accept that in the long run.\u201d<\/h3>\n

There you have it. Instead of conceding to the crooks who made the mess, Iceland listened to its people. And the\u00a0data<\/a>\u00a0speaks for itself.<\/strong><\/p>\n

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Roisin Davis, Assistant Editor – TruthDig.com<\/a><\/strong><\/p>\n

Originally from Northern Ireland, Roisin Davis is a journalist with a background in social research and community work. She holds an MA in Economic History from the University of Barcelona and currently lives in New York.<\/span><\/p>\n

—–<\/h3>\n

There is a better way to do banking;<\/span><\/h2>\n

Germany with 42% Public Banks and 26% Co-op Banks\u00a0proves it.<\/span><\/h2>\n

\u00a0All working for their communities.\u00a0<\/strong><\/h2>\n

It’s a no-brainer!<\/strong><\/span><\/h2>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
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