05 January 2010

Bank Politics in Iceland

Reykjavik, Iceland: (3 January 2010) Hundreds of people gather outside the residence of the president, Olafur Ragnar Grimsson, to submit a petition. Photograph © Reuters.

It seems as though, in some countries, when a significant segment of the populace expresses displeasure at government policy, the government actually pays attention. For the second time ever the President of Iceland has vetoed a bill passed by the legislature. The new law would have saddled the country with an obligation (through loan guarantees) to pay back money that Great Britain and the Netherlands supplied to bail out Icelandic banks when they collapsed in 2008. Of course, the British and Dutch governments actually were bailing out their own citizens who had invested large sums in Icelandic financial institutions. I think they were probably right to do so. But there is no reason I can see that the citizens of Iceland should be saddled with the costs of that decision. Apparently large numbers of Icelanders see things the same way - more than a quarter of the nation's population signed the petition objecting to the new law.

The recently vetoed legislation will - according to the terms of the Icelandic constitution - now be put before the population in a referendum. You can read reports from The Independent here and here. And you can find a story in today's New York Times here. Imagine if American citizens showed up at the White House and demanded something reasonable like health care reform or redefinition of the 'war on terror' or a financial recovery plan that is something other than welfare for large banks.

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Blogger Hans said...



07 January, 2010 05:11  

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