Text 24129, 69 rader
Skriven 2008-11-26 09:58:07 av Ward Dossche (2:292/854)
  Kommentar till text 24110 av Joe Bruchis (1:3828/12)
Ärende: Re: Iceland
===================
JB> What's really happening in Iceland?
 
I guess it's getting cold there this time of the year?
 
JB> We're only getting a few sound bytes
JB> here. It appears the Government won't let them get their money from the
JB> banks and the shelves are going bear in the grocery stores. I hear there
JB> was a public revolt there yesterday.
 
Iceland is a very low-density population country, somewhere 325.000 people but
someone else will probably Google for factual data.
 
The economic activity is limited to fisheries, agriculture (sheep/wool) and
especially banking. Tourism is gaining prominence and there are at least 2
successful airlines (Icelandair and its charter-daughter Loftleidir for
passengers, Polar for freight ... there are smaller others)
 
That's it.
 
Banking was a very successful business becoming the most important activity
until recently when mainly because of unrest in the American markets
interbanking-loans became a problem. It was an issue in many European countries
where governments stepped-in with bail-out programmes. The Icelandic government
couldn't do that because they could not guarantee the large disproportionate
amounts deposited on Icelandic accounts. (the deposited amounts are more than
the Icelandic GNP, you see the problem?) The banks decided not to file for
bankruptcy because that would collapse the whole of the Icelandic economy, but
to freeze operations meaning depositors did not lose their money, they just had
no access to it.
 
People were annoyed and may have protested. But a "revolt" is slightly a
different choice of words which isn't appropriate. People were upset ...
seriously upset, bcause it appeared at the beginning the guaranteed amounts
were really low ... something like 10.000 Euro. In the meantime that has been
upped to 100.000 Euro. Still people don't have access to it.
 
Allowing access would create a rush to the banks and people transferring their
funds to accounts abroad with 2 main results:
 
* Icelandic funds leaving the country. Hence not available anymore for
  Icelandic banks to work with;
* Because banks never have those amounts available and interbank loans were
  impossible, the Icelandic banking system would collapse.
 
Freezing of the accounts was a wise decision.
 
Icelandic banks for years have sollicited customers in Belgium, Luxembourg and
other countries. All these people suffer the same problem now ... their money
isn't lost but they have no access to it for the moment.
 
JB> Gee, weren't they one of the top 5 wealthiest countries in the World?
 
Per capita maybe. The country itself is not that rich.
 
But Icelandic women are the prettiest and most sexy in the world. Those long
dark winter months are a blessing to many guys. 8)
 
They are closely followed by Swedish women, Norwegian, Danish, Finnish ...
 
JB> Will this spread to other countries/nations?
 
The Icelandic economy is typical for that island with a significant part of the
GNP in banking business. It will not occur the same way in other countries, but
events somewhere else can be of the same magnitude.
 
 \%/@rd

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 * Origin: Many Glacier -o=O=o- Preserve - Protect - Conserve (2:292/854)