February 1, 2009

Iceland: Microcosm of What's Coming?

Iceland to be Fast-tracked into European Union to Stop Economic Meltdown

January 30, 2009
Daily Mail, UK

Iceland is to be fast-tracked into the European Union in an attempt to stop the country going into complete financial meltdown, it emerged last night. The small Arctic nation is expected to apply for membership within months and become the 29th member state of the EU within just two years...

Iceland Becomes the First Global Casualty of the 'Credit Crunch'

January 23, 2009
Daily Mail, UK

The government of Iceland has become the first to be effectively brought down by the credit crunch.

After several nights of rioting over the financial crisis, Prime Minister Geir Haarde surrendered to increasing pressure and called a general election for May (a poll would not normally be held until 2011). Haarde also revealed that he had been diagnosed with a malignant tumour of the oesophagus and would not seek re-election.
"I have decided not to seek re-election as leader of the Independence Party at its upcoming national congress," he told a news conference.
The global financial crisis hit Iceland, which has a population 320,000, in October, triggering a collapse in its currency and financial system under the weight of billions of dollars of foreign debts incurred by its banks. Protests had been held weekly since the crisis broke last year, but since Tuesday have been held every night.

On Thursday, police used teargas on demonstrators for the first time since protests against the North Atlantic island's entry into the NATO alliance in 1949. Special forces had to rescue Mr Haarde from his car after he was surrounded by an furious mob hurling eggs and cans outside the government offices in Reykjavik.

The seething crowd spattered the building with paint and yoghurt, yelling and banging pans, hurling fireworks and flares at the windows and even lighting a fire in front of the main doors.
"There were a couple of hundred (protesters) when they had to use the gas," police spokesman Gunnar Sigurdsson said. "It went on for two hours or so. There were no arrests. Some injuries, but not serious."

According to the Associated Press on January 26:

Haarde, who has been prime minister since 2006, said he would officially inform the country's president on January 26 that the government had collapsed... Iceland has been mired in crisis since the collapse of the country's banks under the weight of debts amassed during years of rapid expansion. Inflation and unemployment have soared, and the krona currency has plummeted.

Haarde's government has nationalized banks and negotiated about $10 billion in loans from the IMF and individual countries. In addition, Iceland faces a bill likely to run to billions of dollars to repay thousands of Europeans who held accounts with subsidiaries of collapsed Icelandic banks.

The country's commerce minister, Bjorgvin Sigurdsson, quit citing the pressures of the economic collapse. Sigurdsson, a member of Gisladottir's party, said Icelanders had lost trust in their political leadership.

Thousands have joined noisy daily protests in the last week over soaring unemployment and rising prices.

Latvia, Bulgaria and other European countries hit hard by the global economic meltdown have also seen unrest.

Protesters Clash with Police in Lithuania
Anti-government Protest Held in Bulgaria
Latvia's President Blasts Politicians After Riot

EU States Monitor Spread of Civil Unrest

By Leigh Phillips, EUobserver
January 22, 2009

EU member states are "intensively" monitoring the risk of spreading civil unrest in Europe, as riots over the economic crisis erupt in Iceland following street clashes in Latvia, Lithuania, Bulgaria and Greece.

The worst street disturbances for 50 years struck Reykjavik on Thursday (22 January), as police streamed a hardcore of a few hundred anti-government protesters in the early morning with pepper spray and then tear gas after an earlier crowd of around 2,000 gathered outside the Althingi, the country's parliament, to demand the government resign. The crowds surrounded the building while banging pots and pans and shooting off fireworks. The demonstrators also lobbed paving stones, rolls of toilet paper and shoes.

It was the second day of protests after on Wednesday protesters jostled Minister Geir Haarde's limousine, pummelling it with cans of soft drinks and eggs. The regular demonstrations have strained the government coalition, with the ruling Independence Party on Thursday saying it "realises that there will be elections this year."

Iceland is not an EU member, but the protests could result in it being the first European country to see its government brought down by the economic crisis.
"It's a democracy that has its problems like many other states as a result of the economic crisis," European Commission external relations spokeswoman Christiane Hohmann said.
The events in Iceland come hot on the heels of anti-government clashes in Latvia, Lithuania and Bulgaria in recent days, where economic discontent mixed with local issues erupted in violence. Trade unions in Greece meanwhile warn that further strikes are still likely, after protracted street fighting by students and young workers in December that caused billions in damage.

Concern about the spreading unrest is high on the EU agenda, as governments find it increasingly more expensive to borrow money, putting pressure on social programmes.
"There are concerns. The EU shares them. It is one of the major challenges for the Spring European Council," said a senior EU official, referring to the quarterly gathering of EU leaders.
EU ambassadors in Brussels are discussing the issue and receiving "regular updates," according to another official, although he added that more intelligence on the situation is needed to see whether the riots are "part of a social trend" or manipulation by opposition elements...

In a Wednesday interview with the BBC, the head of the International Monetary Fund, Dominique Strauss-Kahn, predicted that the economic downturn will cause more unrest.
"[It could happen] almost everywhere, in Europe certainly, and also in emerging countries," he said. "You've had some strikes that look like normal, usual strikes, but it may worsen in the coming months."
Asked which countries were most at risk, Mr Strauss-Kahn mentioned Hungary, Ukraine, Latvia and Belarus.
"It can be my own country [France], the UK, it can be eastern Europe," he said. "The situation is really, really serious," he added.

The European Union: Model for World Government
News on the European Union Superstate
European Countries Tired of ‘Difficult’ Irish Says Eurocrat
EU Plans to Force Second Lisbon Vote for Ireland
Nordic Nations to Join EU?
Protests Over Economic Crisis Topple Icelandic Government
EU Moving Forward
Poll Finds Irish Support for EU’s Lisbon Treaty Rises
Rothschild replaces Merrill Lynch as Irish government adviser
Ireland Set for Second Vote on Lisbon Treaty
Ireland's Second Vote on EU's Lisbon Treaty is 'Yes'
One Year Since Banking Collapse, Iceland’s Crisis Deepens
Max Keiser: Icelandic Parliament Member Leads Revolt Against Banksters
Save the People of Iceland: the Official Petition
Forging a Strategic U.S.-EU Partnership
Extending the Transatlantic Agenda to Canada, Latin America and the Caribbean
How the Monsters at Goldman Sachs Caused a Greek Tragedy
Greeks Brace for More Strikes, Protests
Iceland Voters Express Rage Against Bankers, Overwhelmingly Reject "Compensation" Plan
Iceland’s Voters About to Tell Global Banksters to Shove It
US 'Creative Accounting’ Could Repeat Greek Tragedy: CEO
The US could end up with the same problems as debt-laden Greece if it does not get its spending under control and deal with its structural deficit, David Walker, president and CEO of the Peter G. Peterson Foundation, told CNBC.
Forget Greece, The US Almost Had a Failed Treasury Auction
While most of the investment world focuses on the various "senior officials" (none of whom seem to have actual names or positions) commenting on whether Greece will or will not be bailed out/ receive an emergency loan/ offered moral support, etc, a far more significant debt story is emerging in the US.
Riots in Athens as thousands protest against cutbacks
Inside parliament, politicians were debating the €4.8 billion (£4.33 billion) austerity bill, which is expected to pass despite strong opposition.
Collapse of the euro is 'inevitable': Bailing out the Greek economy futile, says French banking chief
The European single currency is facing an 'inevitable break-up' a leading French bank claimed yesterday. Strategists at Paris-based Société Générale said that any bailout of the stricken Greek economy would only provide 'sticking plasters' to cover the deep- seated flaws in the eurozone bloc.
Collapse of the American Empire: swift, silent, certain
"One of the disturbing facts of history is that so many civilizations collapse," warns anthropologist Jared Diamond in "Collapse: How Societies Choose to Fail or Succeed." Many "civilizations share a sharp curve of decline. Indeed, a society's demise may begin only a decade or two after it reaches its peak population, wealth and power."
What Happens If Greece Really Defaults?
Welcome to the United States of Iceland
Iceland, the Mouse that Roared
The Icelanders claim that private banks owe the money to other private banks, not taxpayers. The people who own the private banks should be responsible for paying back the creditor banks, not the people of Iceland. I agree wholeheartedly with that assessment ... It seems that Iceland was fooled into the same ponzi scheme the rest of the world finds itself in. This all revolves around the fact that money in and of itself has no intrinsic value. It is just paper, for the most part, and in the modern world it is just data floating around in cyberspace. Even metal coins are made from cheap and common metals anymore. The fiat system devised by the central banks are designed to collapse at some point, and it’s designed to collapse in such a way that the very few, very rich, very powerful end up with all the marbles. It’s not enough to them, it seems, to be at the top of the heap, they have to be so high up and keep the common folk down so low as to be untouchable. Those that own the banks now hope that they can swoop in and buy up the nation’s infrastructure for pennies on the dollar, or in this case aurar on the krona. This is how they operate. They print money based on nothing but debt at negligible cost to themselves, then charge interest on that debt, interest that is never created by the way, and then when the debt can’t be repaid they end up acquiring all the real wealth that’s been created. It’s a brilliant scheme in its simplicity. They end up with all the real wealth and they risk nothing of any real value.
NBC Nightly News Video: Workers Strike to Protest Spending Cuts in Greece (March 11, 2010)
Iceland, the Mouse that Roared
Those that own the banks now hope that they can swoop in and buy up the nation’s infrastructure for pennies on the dollar, or in this case aurar on the krona.
Police battle demonstrators in strike-hit Greece
Greek police battled demonstrators as the country ground to a halt in the latest protest strike against government austerity measures aiming to end a crippling debt crisis.
Latvia government collapses amid economic crisis
Private Army Sets Sights on Iceland
The comany’s background is shrouded in mystery and they are a mercenary group.

The United States Mission to the European Union - The U.S. Mission to the European Union (USEU) organizes and is involved in numerous activities aimed at strengthening the transatlantic relationship, working out how common U.S.-EU interests can be furthered throughout the world, providing early warning of potential frictions, and resolving problems. Many of these events take place at expert or technical level and may not make newspaper headlines. But they are part of the varied web of ongoing U.S.-EU contacts that makes the economic and political partnership so rich, complex, and fruitful.

Updated 3/19/10 (Newest Additions at End of List)

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