- In his April 8 article headlined, "The Economic
Crisis in Iceland: 'IMF Medicine' is not the Solution," Michael Hudson
- "Will Iceland Vote 'No' on April 9, or commit financial
suicide," their choice being:
- Reject debt bondage or "subject their economy to
decades of poverty, bankruptcy and emigration of their work force."
- In other words, destroying the nation for profit, extorting
its wealth, selling off its natural resources and public enterprises, raising
taxes on working Icelanders, and transforming the country into a dystopian
nightmare, what Merriam-Webster calls "an imaginary place where people
lead dehumanized and often fearful lives," the opposite of utopia
under conditions of deprivation, poverty, disease, violence, oppression,
and terror, like in Orwell's Nineteen Eighty-Four.
- In other writing, Hudson called debt bondage "as
deadly as outright military" defeat. Loss of livelihoods and assets
leave people vulnerable to sickness, despair, and early deaths, much like
what happened in post-Soviet Russia under Washington-imposed "shock
- -- 80% of farmers went bankrupt;
- -- around 70,000 state factories closed;
- -- unemployment became epidemic;
- -- a permanent underclass was created;
- -- poverty rose from two million in 1989 to 74 million
by the mid-1990s, and in half the cases it was desperate;
- -- alcoholism and drug abuse soared;
- -- so did HIV/AIDS 20-fold;
- -- suicides also and violent crime four-fold; and
- -- the population declined by 700,000 a year; by 2007
it was 10% lower than in 1989 because of sharply reduced life expectancies.
- In March 2010, Hudson explained that 93% of Icelanders
rejected bailout terms. Otherwise, they faced repayment for billions in
banking fraud. In fact, they've already been mercilessly hammered by "a
falling GDP, rising unemployment, defaults, foreclosures," and housing
prices down 70% from their peak valuation, heading for mortgaging their
futures unless freed from perpetual debt bondage.
- Icelanders Again Reject Debt Repayment Plan
- On April 10, Al Jazeera said, for the second time, they
said nyet to UK and Netherlands demands. However, whether the current Social
Democratic-Green coalition government goes along is very much open to question,
given its subservience to capital and history of yielding to intimidation.
As a result, it may ignore the referendum results and do what it pleases.
It may be a while before it's clear.
- Prime Minister Johanna Sigurdardottir strongly hinted
the wrong move, telling RUV public radio that economic and political chaos
could follow if debt repayment is abandoned.
- "The worst option was chosen," she said. "The
vote has split the nation in two." Incomplete totals showed 58% voting
"no" against 42% "yes," rejecting outrageous bailout
- Sigurdardottir didn't explain if her coalition government
would resign, saying only that "We must do all we can to prevent political
and economic chaos as a result of this outcome."
- Al Jazeera said the debt problem resulted from "Britain
and the Netherlands compensat(ing) their nationals who lost savings in
online Icesave accounts owned by Landsbanki, one of three Icelandic banks
that collapsed in late 2008."
- Hudson explained it saying:
- Icelanders "dream was dashed after the Icesave electronic
Internet bank branches abroad were emptied out by their proprietors. Britain
and the Netherlands paid out more than $5 billion to some 340,000 of their
own depositors whom their own bank oversight agencies had failed to warn
about the looting going on. Iceland's taxpayers were told to bear the cost,
as virtual tribute."
- Those voting "no" reject the "incredible
financial burden," saying "there never was any legal obligation
for Icelandic citizens to shoulder the losses of a private bank."
- Iceland's Finance Minister Steingrimur Sigfusson said,
"It is clear that we have reached the end of the negotiation road."
- Sigurdardottir said Iceland would defend its position
before the European trade body court overseeing its cooperation with the
European Free Trade Association Surveillance Authority, EFTA Surveillance
- Last year, ESA said Iceland should should repay Icesave
depositors. On April 8, Britain's chief secretary to the treasury, Danny
Alexander, expressed disappointment, saying:
- "It is obviously disappointing that it seems that
the people of Iceland have rejected what was a negotiated settlement....It
looks like this process will now end up in the courts. There is a legal
process going on and we will carry on through these processes to try and
make sure we do get back the money that the British government paid out
in past years."
- In fact, it was extorted. In 2010, then Prime Minister
Gordon Brown stunned Icelanders by invoking anti-terrorism legislation
to safeguard British savers, making him in their view no different than
pillaging marauders comparable to Viking invaders.
- After again rejecting debt bondage, expect more pressure
and threats to intimidate Iceland's government to dismiss voter wishes
and pay up - what Hudson calls financial warfare.
- Moody's fired the first volley, saying if repayment demands
aren't met, it "may" lower Iceland's credit rating, making if
more expensive to borrow, forcing them deeper into debt.
- Last March, after voters first rejected repayment, Fitch
Ratings cut Iceland's credit to junk, while Moody's and Standard &
Poor's gave it their lowest investment grade.
- In fact, all the major credit rating agencies are in
bed with predatory bankers and their governments, waging financial warfare
when targeted nations like Iceland balk about extortion terms.
- An undated Bloomberg report said:
- "A final count showed 59.7% of voters said no to
the so-called Icesave agreement, while 40.1% said yes, according to broadcaster
RUV, which based its count on figures published by regional electorate
- Voter turnout was 75%. On Sunday, Netherlands Finance
Minister Jan Kees de Jager said:
- The "time for negotiation is over. Now the court
will decide on this." Iceland must meet its financial obligations.
Ultimately, the Netherlands will get its money back, even through extortion
if Icelanders don't accept debt bondage, poverty, bankruptcy, and perpetual
misery as long as they remain in Iceland.
- However, Hudson says "Iceland has a strong legal
case. Social Democrat warnings about the EU seem (way) overblown"
about fraud committed by others. So it's "a strange time (to consider)
tak(ing) bad debt bank debts onto its own balance sheet" instead of
letting the crooks repay the losses.
- Repaying, of course, will shrink Iceland's economy (and
other countries going along) making it harder ahead to service debt, a
vicious downward cycle to economic ruin.
- For months, the same process was replicated across Europe,
notably in so-called PIIGS countries - Portugal, Ireland, Italy, Greece
and Spain, besides other Eastern European ones.
- In the West, trouble began in Greece, Hudson explained,
- "This led to budget deficits, and Wall Street banks
helped the government conceal its public debt in 'free enterprise' junk
accounting. German and French creditors then made a fortune jacking up
the interest rate that Greece had to pay for its increasing credit risk."
- The usual scenario then played out, Greece, like other
troubled countries, told to tax labor, cut social benefits, slash public
payrolls and wages, and charge more for government services. In other words,
"turn the(ir) econom(ies) into a giant set of tollbooths."
- The Baltic Tigers led the way, explained Hudson, public
wages falling up to 30% and GDP over 25%. As a result, Latvia won't "recover
even to its 2007 pre-crisis GDP peak until 2016 - an entire decade"
lost to financial predators, ripping off countries for profit, strangling
them, hammering ordinary people most, a disease infesting Europe and increasingly
America to institutionalize neoserfdom from one country to another, perhaps
- In the Eurozone, Ireland's been hardest hit, facing "decades
of austerity," unless they break out of their trap. As a result, "the
largest forced emigration (followed) since the Potato Famine of the mid-19th
- Today, says Hudson, "finance is the new mode of
warfare," cleaner, cheaper but just as destructive, hammering people
with poverty and despair instead of bombs and invading hordes. Bankers
are today's invaders, extracting neoliberal tribute through predatory debt
bondage, forcing repayments in perpetuity in some cases, especially in
- Hudson explains the obvious solution, the choice Argentina
made a decade ago, saying nyet to pay up demands, having "little trouble
in imposing a 70%" haircut on foreign creditors, take it or leave
it. They took it, returning the country to economic health and prosperity,
once freed "from its financial albatross!"
- The pattern repeated "in Latin America and other
Third World countries after Mexico announced that it could not pay its
foreign debt in 1982." Write-downs followed in Brady Bonds, "applauded"
at the time "as a success story."
- Today, it's a different story, countries like Iceland,
Greece, Ireland and others told pay up or else, and accept "a generation
(or more) of austerity, shrinkage and emigration."
- Their choice, of course, is neoliberal bondage or freedom.
Icelanders chose the latter in March 2010 and again on April 9. It's now
up to their government to serve them or sell them out to UK and Dutch predators.
Don't bet on it doing the right thing.
- Stephen Lendman lives in Chicago and can be reached at
firstname.lastname@example.org. Also visit his blog site at sjlendman.blogspot.com
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