Wednesday, January 30, 2013

Winning is not everything

My English is not as good as I would like it to be but I think I have the word that well describes a victory that just came our way here in Iceland: bittersweet. The happiness associated with winning, tainted by the events leading up to it.

Two days ago Iceland won the court case filed against the country by the EFTA Surveillance Authority and later in some strange manner co-filed by the EU. It was tried before the court of the Europe Economic Community. Lots of big official words and lots and lots of capital letters flying around.
The case regarded our failed banks, private institutions whose debt was to be nationalised. Aided by a group of people that started up a movement called Indefence and then later our president, the public ended up refusing any attempts of Icelandic officials to place humongous burdens on the taxpayers, thereby taking a different approach to such a scenario than most countries.
And we ended up getting sued – pay up or else. But surprise, surprise: We won. The debt of private companies has nothing to do with the public. Hurrah.

One thing must be noted. Account holders in the Icelandic bank branch offices in question have  already been repaid. The UK government and the government of Holland stepped up and paid their citizens soon after the banks closed and the legal teams in charge of the estates of the defunct banks have been repaying these countries since. I understand that the full amount has almost been repaid - piecemeal with the selling of the assets - and that 100% is expected to be repaid with time. Soon even.

What has not been paid is interest on the money Britain and Holland paid out at the end of 2008 and have now at the beginning of 2013 almost fully recaptured. Hence the court case, apparently the people of Iceland were supposed to pay 5.55% interest on those exuberant sums. The interest amounts were staggering so one can imagine what the capital sums must have amounted to. But the courts threw this out and also announced that Iceland was under no obligation to repay the money in the first place, let alone the interest. Privatising the earnings and nationalising the debt no more applies to banks than any other company. These were private banks, no different from airlines, shoe factories or ice cream parlours. Why should it be my problem if some bank alongside its rich owners goes bust?   

This whole thing is so complex that my version is not particularly thorough and I can only hope you have managed to follow and that  have not been too one-sided. At least according to the court there is actually but one side in this. For those fluent in legalese I suppose I must add that in order to repay the account money Iceland changed its laws in order to move account holders to the front of the debtors’ queue and were thus able to use the bank assets to pay back the UK and Holland. These assets I might add were not in Iceland. Aside from Icelandic mortgages that were sold off to no gain of the mortgage holders, all or most of what the banks owned was located in Europe.
Below is a simplified, cartoon version of events by NMAWorldEdition. It is subtitled in English but note that the spoken language is not Icelandic.  

So why is the victory bittersweet? We won and fairly so. However, there is no getting away from the fact that the people who held the accounts were caused all sort of troubles because of this banking debacle. For them I feel very bad. Cringeworthy is the mess our banks made and the problems they caused other nations. It annoys me to no end that this pyramid scheme a.k.a. banking was associated with my country. 

To end this on a fully positive note I would like to share with you a video made by the city of Reykjavík in its attempt to secure the World Outgames in 2017. When I watch the segment I am proud of my country. Some of us may suck at banking but we do get the important stuff right. It does not hurt that the campaign is the brainchild of a great guy and friend of mine - Ingi Þór.  The song is Icelandic, singer Þórunn Antónía belting out a feel good tune called: Too late. 

Reykjavík is competing with Miami - fat chance they have. Winning obviously makes me cockey - is there not a saying out there: Cockyness comes before the fall. If not there should be.

Yrsa - Wednesday


  1. Your English may not be as good as you'd like it to be, Yrsa, but if Shakespeare were still around he'd be more than happy to settle for your grasp of it. Speaking of grasping, so glad to hear that Iceland repelled the lawyers. And in the style that they did. We from the land of "too big to fail" can only marvel at your countrymen's resourcefulness. And while on the subject of marveling, what a terrific video by your friend on the Outgames. If you send me posters asking prospective participants to support Rekjavik's bid, I'll gladly put them up on Mykonos in spots where those sorts of games run all summer, every summer.

  2. Hi Jeff - you always manage to make me smile. I am referring to the Mykonos comment and the ongoing summer games you have there.

    But out of respect for lawyers I must add that our victory was not in least due to our legal team's performance. Stupid me not to have mentioned them. They have not been very much in the public eye, I think they were British and were not here much. We probably would not have understood them anyway - listening to difficult legal stuff with regulation numbers is not our forte here in Iceland.

  3. Iceland's story has been inspiring. Now, if only the rest of the world (especially those of us in the U.S.) can take a lesson and not reward these banks for bad behavior.... or better yet, stop them before they start.

  4. Really, Yrsa, your grasp of English would put to shame at least 80-90% of the American populace, I think!

  5. I second Everett. And kudos to Iceland for showing the rest of us how to stand up to bankers.

  6. I second Everett and then Annamaria. The USA hasn't learned its lesson yet, it seems. Good luck of the games!

  7. I will third! Or fourth. Iceland is one of the only countries that handled the thing right, IMO.