Britain threatens to freeze Iceland out of EU as loan payback vetoed

Times Online ^ | 1/6/10 | Suzy Jagger and Jill Sherman

[FromLori]

Britain warned Iceland that it would be frozen out of the European Union after its President abruptly vetoed the repayment of a £3.6 billion loan.

The Treasury expected Reykjavik to rubberstamp the terms of repayment for the loan extended by Britain and the Netherlands at the height of the financial crisis. The loan meant that 400,000 savers with deposits in Icesave did not lose their money.

President Ólafur Grimsson stunned the world’s financial community by refusing to sign the repayment schedule into law. Instead, he said that the matter would be decided in a referendum among Iceland’s 243,000 voters.

The decision threatened to bring down the Icelandic Government, took its financial system to the brink of collapse and sparked the worst row with Britain since the Cod Wars of the 1970s. Fitch, the international rating agency, downgraded Iceland’s credit rating to junk status.

[FromLori]

ping

[Porterville]

promises, promises... I trust a brit with refreshing freedom from chains like I trust a 3 week old haggis not to collect bottle-glass fly maggots.

[Gay State Conservative]

Iceland isn't a member of the EU.They're a member of the EEA,which is kinda like the EU,but not the EU itself.

[mike-zed]

Let’s see. Iceland gets

- to default on its debt
- stay out of the EU

Sounds like a slam dunk win-win.

Now, if only I could work out something similar with my mortgage and the Obama/Pelosi/Reed trainwreck.

[Leifur]

Exactly Mike-Zed, the good news just keep on coming for us!

[April Lexington]

Don't worry, Iceland. You can join Texas! Let me get this straight. 400,000 or so rich people buy CDs on-line from some Iceland bank. The bank fails and England and the Netherlands pays their rich folk back and asks Iceland to enslave its 320,000 citizens to pay back the money the greedy and incompetent bankers lost? Do I have this straight? If I were an Icelander, I'd tell the government and the banks to enjoy one last cigarette before putting on the blindfold... Why should the tax payers have to bail out a lousy bank?

[April Lexington]

President Ólafur Grimsson stunned the world’s financial community by refusing to sign the repayment schedule into law. Instead, he said that the matter would be decided in a referendum among Iceland’s 243,000 voters.

If those voters approved that bailout, they would be enslaving themselves. They cannot possibly pay that kind of money back in one or two generations...