In publishing an article from the Icelandic point-of-view, The Guardian has made Icelandic friends where some other British newspapers have failed over the last week.
The Guardian story by John Henley describes Icelanders as, “Confused and angry,” and “Wondering why Britain appears to be doing its best to push their country over the edge.”
“There’s an anti-Iceland thing going on. But why? Why are you behaving like this?” one unnamed Landsbanki analyst asked Henley. “Is Gordon Brown happy to have a small, badly weakened scapegoat to distract attention? In any case, it’s succeeded: Britain has destroyed whatever confidence there was left in Iceland.”
Saeunn Kjartansdottir, a Reykjavik psychotherapist was less philosophical: “In Iceland we have been told consistently that the Icelandic government has from the start of this crisis had every intention of paying their due to British savers. We have been told that our finance secretary said this very clearly to your chancellor. And then the very same day, Mr Darling appears on British television and claims the opposite!”
The Guardian also reports that executives at Kaupthing bank believe the Bank could have avoided nationalisation, as IceNews also reported earlier in the week. The executives blame their downfall on the British government for seizing their British operations by force and selling them to the Dutch giant ING. Kaupthing was not responsible for Icesave.
Finnur Oddsson of the Icelandic Chamber of Commerce: “It is simply not true to say that Iceland has defaulted. The Icelandic government has never said it will not pay. Certainly the message we are getting in Iceland is that these banks have been nationalised, that they have assets abroad and that those assets will be used pay off what British savers have in their accounts. And the government has said it will back all depositor guarantees.”
While Iceland admits their greedy bankers have brought at least some of the crisis on themselves, they are also surprised at some of their supposed allies, according to The Guardian. The Prime Minister, Geir H. Haarde, said the country had turned to Russia in search of a EUR 4 billion loan because EU partners had proved unwilling. And others point the finger at America too – a country that maintained a large military base at Keflavik until recently.
The article’s conclusion is that the Icelandic economy, and especially its currency, is just too small to weather such an economic storm. Indeed, the Icelandic krona is the world’s smallest free-floating currency by quite some margin.
Henley concludes that Iceland will have to take a different currency or peg its exchange rates against a bigger neighbour. This would work in much the same way that all the Eurozone currencies were pegged to the euro before the currency was available in cash form. Despite remaining outside of the euro, the Danish krone has had been pegged to it for nearly a decade.
