Monday, April 11, 2011

Iceland Again Rejects Debt Deal

REYKJAVIK (Reuters) - Iceland faces more economic uncertainty and a drawn-out European court case after its voters rejected for a second time a plan to repay $5 billion to Britain and the Netherlands from a bank crash.

The British and Dutch governments voiced disappointment with the result of Saturday's referendum, in which almost 60 percent of voters opposed the repayment deal.

"We must do all we can to prevent political and economic chaos as a result of this outcome," Prime Minister Johanna Sigurdardottir told state television.

The issue will now be settled by the court of the EFTA Surveillance Authority (ESA), the European trade body overseeing Iceland's cooperation with the European Union.

"My estimate is that the process will take a year, a year and a half at least, Finance Minister Steingrimur Sigfusson told a news conference.

The debt was incurred when Britain and the Netherlands compensated their nationals who lost savings in online "Icesave" accounts owned by Landsbanki, one of three overextended Icelandic banks that collapsed in late 2008, triggering an economic meltdown in the country of 320,000 people.

Economists have said failure to resolve the issue means Iceland faces delays ending currency controls, boosting investment and returning to financial markets for funding.

But the center-left coalition government said it would not resign despite the defeat.

"The government will emphasize maintaining economic and financial stability in Iceland and continuing along the path of reconstruction which it began following the economic collapse of 2008," it said in a statement.

It said a fresh round of talks on further funding from the International Monetary Fund, which led a bailout for the island, would be delayed several weeks, but that it had enough foreign exchange reserves to cover debts maturing this year and next.


The proposed deal at issue in Saturday's vote set a clear timetable for repaying the Dutch and the British, including interest. But voters rejected the idea that taxpayers should foot the bill for what they see as bankers' irresponsibility.

"I know this will probably hurt us internationally, but it is worth taking a stance," Thorgerdun Asgeirsdottir, a 28-year-old barista, said after casting a "no" vote.

Dutch Finance Minister Jan Kees de Jager said: "This is not good for Iceland, nor for the Netherlands. The time for negotiations is over. Iceland remains obliged to repay. The issue is now for the courts to decide."

Economists have said the court route could be much costlier.

The government still hopes most of the debt will eventually be paid back from the estate of the bankrupt Landsbanki. Ratings agencies were following the vote closely. Moody's had said it might lower Iceland's rating in case of a 'no'.

Standard & Poor's analyst Eileen Zhang said a 'no' vote "might possibly result in a lengthy legal process and further uncertainties regarding the ultimate fiscal cost."

(Additional reporting by Sara Webb in Amsterdam and Avril Ormsby in London; Editing by Mark Trevelyan)

($1=113.31 Iceland Krona)

New limits for food set by EU (neu 08/04) compared to limits Japan notice, codex alimentarius

Bob Chapman - JPM & HSBC Silver Contract DEFAULT - 04-08-2011

Inflation Is Much Higher What The Government Admits - Marc Faber on Goldseek Radio 04/08/11

April 20th Gulf Coast Memorial Concerts


On April 20th a series of concerts will be held in communities across the Gulf Coast on the one year memorial of the worst man made disaster in our nation’s history. Countless artist are giving their time and talents to honor the 11 men that lost their lives and address the long term environmental and health impacts to the region.

Tipitina’s French Quarter location 233 N Peters St. will host Dr. John (Malcom Rebennack), Drew Landry, Shannon McNally, Michael Juan Nunez, The Treater Band, Grey Hawk, Fi Yi Yi and many other talented musicians starting at 7:30 pm. We see this spill as a catalyst for working toward energy Independence, self responsibility, and charting a sustainable course for our planet.

Bobby Charles left behind some of the best songs of all time, but his real passion was the “Solution to Pollution”. His best friend Mac Rebennack (Dr. John) and Louisiana Songwriter Drew Landry teamed up with Dockside studio in Maurice to expand on Bobby’s vision and finish a full length “Solution to Pollution” CD inspired by his work. A five song EP will be available at the show and from the Louisiana Music Factory while monies collected will go to finishing the full length Album & implementing his ideals in local communities.

The show starts early at 7:30 PM at Tipitina’s French Quarter Location(233 N. Peters) and there will be more special guest announced and interactive events. Tickets will be available for $25 @ in advance $30 at the door.

In addition free shows will be held at all Shed BBQ locations from Louisiana to Florida from 6-9 PM. Symptom Sheets will be available for coastal citizens, fishermen, and clean up works who have fallen ill since the disaster. We ask that folks consider giving guitars of some value as part of our fundraiser. Recording artist will sign these instruments and proceeds will be divided between the Louisiana Environmental Action Network for long term health monitoring in the Gulf Region and getting the Solution to Pollution project finished. Please see for updates on artist and locations. Feel free to bring instruments you plan to donate to any Shed location or to Tipitina’s in the French Quarter location the night of April 20th.

Last and most important is that many coastal citizens, clean up workers, and those that spent time on the coast during the spill continue to have health issues from exposure to the crude and the dispersant . Forms will be provided to track their symptoms and connect with support. Gulf Coast Fund has helped us with printing cost for symptom sheets that will allow the Louisiana Environmental Network to continue tracking symptoms of coastal citizens who were exposed to toxic conditions following the spill. For info about symptom sheets or the great work LEAN has been doing for the last 25 years please go to

A note from Drew Landry- I am currently supporting Cherri Foytlin on her Walk to Washington D.C... The journey has connected us with elected officials and citizens across the country who are feeling the economic effects of the spill. Cherri & I will be speaking to young people at power shift and we will be meeting with various agencies & lawmakers to discuss condition in the Gulf. Please send any info you would like to get to Washington to

For a full listing of all events on the memorial of the worst man made disaster in US history will be available @ by April14th...

UK 'disappointment' as Iceland rejects repayment deal

Icelanders have rejected the latest plan to repay the UK and Netherlands some 4bn euros lost when the country's banking system collapsed in 2008.

Partial referendum results show 58% voting no, and 42% supporting the plan.

Johanna Sigurdardottir, Iceland's Prime Minister, said the rejection meant "the worst option was chosen".

UK Treasury minister Danny Alexander said the decision was "disappointing" and the matter would go to an international court.

Dutch Finance minister Jan Kees de Jager said he would be consulting Britain about taking further steps against Iceland, but added that the matter would likely end up in court.

"I am very disappointed that the Icesave agreement did not get through. This is not good for Iceland, nor for the Netherlands.

"The time for negotiations is over. Iceland remains obliged to repay. The issue is now for the courts to decide," Mr de Jager said in a statement.

It is the second time a referendum has rejected a repayment deal.

Iceland's Landsbanki bank ran savings accounts in the UK and Netherlands under the name Icesave and investors there lost 4bn euros (£3.5bn; $5.8bn).

When it collapsed in 2008, the British and Dutch governments had to reimburse 400,000 citizens - and Iceland had to decide how to repay that money.

Mr Alexander, Chief Secretary to the Treasury, said on the Andrew Marr programme: "It's obviously disappointing... We tried to get a negotiated settlement.

"We have an obligation to get that money back, and we will continue to pursue that until we do... We have a difficult financial position as a country and this money would help," he said.

'Such a revulsion'

Iceland's parliament had backed the deal, but President Olafur Ragnar Grimsson refused to sign it, triggering the referendum.

A previous deal, imposing a tougher repayment regime, was rejected in a March 2010 referendum by 93% of voters.

Finance Minister Steingrimur Sigfusson appeared to rule out a third attempt to persuade voters to accept a repayment deal.

"I think we're getting a very clear sign from this referendum, that further negotiations are ruled out. No use in trying that again."

The issue will now be referred to an international court, the European Free Trade Association Surveillance Authority, a process which could take several years.

Backers of a "yes" vote had argued the repayment deal was the best way to resolve the issue in terms of cost and risk to Iceland.

The "no" camp said the Icelandic taxpayer was under no legal obligation to pay for a private bank's losses and that the deal would put a heavy burden on the nation.

Longer period, lower interest

Under the terms of the rejected deal, Iceland would have paid the money back with 3.3% interest to the UK, and 3% to the Netherlands, over 30 years between 2016 and 2046.

Under the previous proposal, the money was to be paid back with 5.5% interest between 2016 and 2024.

Prime Minister Johanna Sigurdardottir Prime Minister Johanna Sigurdardottir: "Disappointing numbers"

The actual cost to the state was expected to be much less than the 4bn euros owed, as the government said most of the repayment would come from selling the assets of Landsbanki.

The government has said it did not expect the cost to exceed 50bn kronur (£168m).

Analysts say a resolution of the issue is vital to Iceland's prospects for recovery because it would allow the country to return to the financial markets to fund itself.

Solving the dispute is also seen as key to Iceland's chances of joining the EU.

Iceland's three main banks collapsed within days of each other in October 2008.

The government compensated Icelandic savers, but overseas customers faced losing all of their money.

The issue sparked a diplomatic row between Iceland and the UK, and created uncertainty over Iceland's economic recovery.