Iceland ”partly forgives Mortgage Debt ”
”This is awesome. It shows when the people DO STAND UP they have more power and win against the corrupt bankers and politicians of a country. Iceland is forgiving and erasing the mortgage debt of the population. They are putting the bankers and politicians on the “Bench of the Accused.” Which means I assume they are putting them on trial for corruption.
Now the rest of people of the world need to start doing the same thing. We all need to stand up and against all the corruption and fraud of the banks and politicians that are puppets of the banks and corporations.” Sherrie
The country’s banks forgave loans equivalent to 13% of gross domestic product, according to a Bloomberg article Richard cites. The equivalent in the United States would be about $1.95 trillion of mortgage debt writedowns. Icelandic banks agreed to forgive all mortgage debt over 110% of a home’s value. “I think I may have been one of the first commentators with a wide audience to point out how relatively well Iceland was doing.” What he didn’t mention, though his commentator “iInfoliner” did, is that the credit rating agency Fitch upgraded Iceland’s debt to investment grade last week. Moreover, according to the Business Week story, the country can now borrow in U.S. dollars at a mere 4.77%. Compare this to Greece at 35.98% and Portugal at 12.77%; even Spain and Italy are a little over 5% (the FT link has no rates listed for Ireland, which has no 10-year bond).The moral of the story is that a different approach to dealing with the banks is necessary. http://www.dailykos.com/story/2012/02/24/1067831/-Iceland-Solves-Banking-Crisis-by-Indicting-Bankers-Forcing-Mortgage-Relief
C0rrection., Iceland had to forgive just a part of mortgage debt
The romantic view on Iceland
There is one misunderstanding apparent when Iceland and Ireland are compared. People seem to sometimes think that Icelandic people said “Oh, hell no! We’re not going to save your arses, you just have to go bankrupt and that’s the end of it” to the banks. Some people make a gesture to Icesave referendum to justify that point of view. Furthermore, the “splendid” 110% debt write-off that was passed by the parliament is considered to a fantastic success and shows on top of that the will of the people to simply get the banks to understand that debts that cannot or should not be repaid, won’t be repaid.
Sorry, there is a bit of romanticism in this story.
First, the Icelandic government tried absolutely everything it could possibly do in 2008 to save the banks. It was Iceland’s “fool’s luck” to have allowed the banks to grow up to 1,000% of GDP that made the government rescue impossible. There was no other choice than to let the banks go bankrupt, even though it has been painted in the foreign media as “Iceland chose to let the banks go bankrupt instead of shoring up their broken pieces.”
Second, the Icesave agreement was forcibly passed through the parliament by the government. It was the president that stopped the bill to become a law after the world of bloggers had been on fire for months while the public anger against the government ascended day by day. More importantly, the Icesave dispute had nothing to do with Icelandic “banksters” as they were called by that time. It was and is an international quarrel regarding how to interpret the EU/EEA treaty concerning deposit insurance schemes and passport-banking within the EU. Icesave wasn’t and isn’t a question of bailing out the banks.
Third, the 110% debt write-off that was introduced by the government hasn’t been that successful and certainly not very influencing in the overall scheme of things.
Hanged-Man-Project! :-summary of the Icelandic revolution: -resignation of the whole government -nationalization of the bank. -referendum so that the people can decide over the economic decisions. -incarcerating the responsible parties -rewriting of the constitution by its people Have we been informed of this through the media? Has any political program in radio or TV commented on this? No! The Icelandic people have been able to show that there is a way to beat the system and has given a democracy lesson to the world ...See More Wall Photos ICELAND. No news from Iceland?… why? How come we hear everything that happens in.. By: RePeace
ICELAND. No news from Iceland?… why? How come we hear everything that happens in Egypt but no news about what’s happening in Iceland:
In Iceland, the people has made the government resign, the primary banks have been nationalized, it was decided to not pay the debt that these created with Great Britain and Holland due to their bad financial politics and a public assembly has been created to rewrite the constitution.
And all of this in a peaceful way. A whole revolution against the powers that have created the current global crisis. This is why there hasn’t been any publicity during the last two years: What would happen if the rest of the EU citizens took this as an example? What would happen if the US citizens took this as an example.
This is a summary of the facts:
2008. The main bank of the country is nationalized.
The Krona, the currency of Iceland devaluates and the stock market stops. The country is in bankruptcy
2008. The citizens protest in front of parliament and manage to get new elections that make the resignation of the prime minister and his whole government.
The country is in bad economic situation.
A law proposes paying back the debt to Great Britain and Holland through the payment of 3,500 million euros, which will be paid by the people of Iceland monthly during the next 15 years, with a 5.5% interest.
2010. The people go out in the streets and demand a referendum. In January 2010 the president denies the approval and announces a popular meeting.
In March the referendum and the denial of payment is voted in by 93%. Meanwhile the government has initiated an investigation to bring to justice those responsible for the crisis, and many high level executives and bankers are arrested. The Interpol dictates an order that make all the implicated parties leave the country.
In this crisis an assembly is elected to rewrite a new Constitution which can include the lessons learned from this, and which will substitute the current one (a copy of the Danish Constitution).
25 citizens are chosen, with no political affiliation, out of the 522 candidates. For candidacy all that was needed was to be an adult and have the support of 30 people. The constitutional assembly starts in February of 2011 to present the ‘carta magna’ from the recommendations given by the different assemblies happening throughout the country. It must be approved by the current Parliament and by the one constituted through the next legislative elections.
Debt write off was only partial
The 110% debt write-off was simply a measure that was offered to over-indebted households. It was very simple on the surface: if your mortgage was higher than 110% of the estimated market value of the property, you could have the debt written off down to the 110% mark.
The total debt that was written off based on this jubilee was 43.6 billion krona. On top of that came 6.2 billion due to “special measures”. In comparison, the debt that was written off due to illegal foreign-exchange-linked loans was 146.5 billion krona. In September 2008 (the last point in time where it is known how high the face value of household debt was) the debt of households was 1,890 billion krona (128% of GDP). The government induced debt write-off has been roughly 2.5% of the total debt of households. Is that meant to be a huge turning point? Give me a break! The indexed debt of households has in the meanwhile risen by a rough estimation of 200 billion ISK due to rise in consumer prices since 2008. This is not a typo.
Longer term view
The debt dynamics in the Icelandic economy are scary! The mortgage and financial system is built to collapse, it is an unmissable feature of the organisation of the system.
Shit on the system! Tögg: english When Elections took place in Iceland one voter decided to use his rights to vote. Showed up at the voting station and literally took a dump on the political party system, the power abuse and the general democracy distortion, wiped his ass on the ballot, neatly folded it and slipped into the ballot box. HEHEHE The video is here http://aftaka.rusl.org/tag/english/
- Iceland forgives mortgage debt of its population (talesfromthelou.wordpress.com)