iceland&debt forgiveness

drdeadlift

http://rt.com/news/iceland-debt-relief-measure-535/


Going against the grain again, their aim os to increase disposal income and help people save.
Is the air cleaner up ther?

camel jockey

The food is cheaper in Iceland, so yes, it does indeed increase disposable income and help people save.

I've seem them stock cherry Coke in the Ilac store, if case anyone is interested.

snubbleste

There was a general election and the parties that won had promised this write-off. Nice to see they are honouring it.

speedboatchase

snubbleste wrote: »

There was a general election and the parties that won had promised this write-off. Nice to see they are honouring it.

Any party that proposed something like this would win any election. But governing isn't about just giving people what they want and absolving personal responsibility. Wonder where it will be coming from and how that will affect foreign investment.

camel jockey

speedboatchase wrote: »

Any party that proposed something like this would win any election. But governing isn't about just giving people what they want and absolving personal responsibility. Wonder where it will be coming from and how that will affect foreign investment.

Sounds like something Sinn Fein would attempt.

speedboatchase

camel jockey wrote: »

Sounds like something Sinn Fein would attempt.

Sinn Fein will say anything to be elected.

drdeadlift

speedboatchase wrote: »

Sinn Fein will say anything to be elected.

Read the article.

Phoebas

drdeadlift wrote: »

Read the article.

Link doesn't work.

Edit: Temporary or local thing. Its up now.

camel jockey

Phoebas wrote: »

Link doesn't work.

Hijacked by SF.

darkpagandeath

However, Gunnlaugsson has promised that public finances will not be put at risk. It was initially proposed that the foreign creditors of Icelandic banks would pay for the measure.

seems interesting, Says the IMF are moaning about it in the article to

lertsnim

speedboatchase wrote: »

Sinn Fein will say anything to be elected.

This is different to any other party?

camel jockey

lertsnim wrote: »

This is different to any other party?

Yes, because with SF you know for a fact it is BS. With others there is always the chance they will follow through.

Phoebas

The government said that the debt relief will begin by mid-2014 and
according to estimates the measure is set to cost $1.2 billion in total. It
will be spread out over four years.

The financing plan for the program has not yet been laid out. However, Gunnlaugsson has promised that public finances will not be put at risk. It was initially proposed that the foreign creditors of Icelandic banks would pay for the measure.

So basically everyone gets 'free' money, but they don't know whose going to pay for it.

Mark me down as sceptical.

lertsnim

camel jockey wrote: »

Yes, because with SF you know for a fact it is BS. With others there is always the chance they will follow through.

Or that any other party is probably bull****ting too. We found this out with the current government,

Jonny7

and for those who avoid Putin's news agency like the plague

http://uk.reuters.com/article/2013/11/30/uk-iceland-debt-idUKBRE9AT08Y20131130

It equates to a mark down of €6,000 a year for 4 years. How much extra will people have in their pockets in reality? At most, between €25 and €100 a year.

Banjo String

That must be why mums go there so.

darkpagandeath

Banjo String wrote: »

That must be why mums go there so.

For the Arctic roll ??

drdeadlift

camel jockey wrote: »

Yes, because with SF you know for a fact it is BS. With others there is always the chance they will follow through.

From what I have seen in irish politics over the past few years each party is as bad as the next.if you live in Ireland you would/should know this.

drdeadlift

Phoebas wrote: »

So basically everyone gets 'free' money, but they don't know whose going to pay for it.

Mark me down as sceptical.

Or you could say the banks will simply make a loss on the amount of interest earned.

drdeadlift

drdeadlift wrote: »

Or you could say the banks will simply make a loss on the amount of interest earned.

The amounts are so small, that I doubt the banks will make a loss. The Government has bought a vote and unless they have realistic policies in place, it will be an expensive exercise for the country in general. Where is the point in writing down debts of people that don't need it?

camel jockey

drdeadlift wrote: »

From what I have seen in irish politics over the past few years each party is as bad as the next.if you live in Ireland you would/should know this.

Better the devil you know. There's ALWAYS something worse.

Phoebas

drdeadlift wrote: »

Or you could say the banks will simply make a loss on the amount of interest earned.

Its capital write down they're proposing, not an interest rate reduction. So either the government is somehow going to force the banks to default on its debt or they are going to put it onto the national balance sheet - which amounts to converting household debt to sovereign debt.

I'm still sceptical; even more so when people start describing this as 'simple'.

For Forks Sake

This article is from this time last year, i.e before the election of the current govt, but debunks a lot of he myths put around regarding Icelands economic tactics : http://studiotendra.com/2012/12/29/what-is-actually-going-on-in-iceland/

Reindeer

It will be interesting to see what comes of it. Iceland's budget is about 6 billion a year. .3 bil/yr out of that for four years is gonna sting, That's nearly what the top bankers make.

karlth

The debt relief will be financed with a bank tax, majority coming from a tax on the winding up of the old banks.

Phoebas

karlth wrote: »

The debt relief will be financed with a bank tax, majority coming from a tax on the winding up of the old banks.

Islandic banks couldn't possibly withstand a bank tax equal to €24,000 for every household in the country. Figures don't add up.

karlth

Phoebas wrote: »

Islandic banks couldn't possibly withstand a bank tax equal to €24,000 for every household in the country. Figures don't add up.

The old banks had assets that at the time were worth more than 10x the GDP.

Phoebas

karlth wrote: »

The old banks had assets that at the time were worth more than 10x the GDP.

They had debts that were worth more than 10x the GDP. The Islandic banks borrowed hugely for assets whose prices since collapsed.

Are you trying to see a story of asset rich Islandic banks that are in a position to pay over billions extra in tax to the state? That's a fairy-tale.

karlth

Phoebas wrote: »

They had debts that were worth more than 10x the GDP. The Islandic banks borrowed hugely for assets whose prices since collapsed.

Are you trying to see a story of asset rich Islandic banks that are in a position to pay over billions extra in tax to the state? That's a fairy-tale.

The old Icelandic banks(that are being would up) own assets worth around $20 billion. The tax per year is around $300 million.

Phoebas

karlth wrote: »

The old Icelandic banks(that are being would up) own assets worth around $20 billion.

You completely disregard Icelandic bank's debt, which greatly exceeds their assets. They just don't have the money to fund this.

speedboatchase

speedboatchase wrote: »

Any party that proposed something like this would win any election. But governing isn't about just giving people what they want and absolving personal responsibility. Wonder where it will be coming from and how that will affect foreign investment.

Foreign investment will be forward looking not backward looking. A debt reduction actually makes Iceland more attractive for investment, with higher disposable incomes among consumers.

"But governing isn't about just giving people what they want and absolving personal responsibility."

Yes it is, if you're a big and powerful bank. Good to see Iceland putting its citizens interests ahead of the financial lobby.

Deleted User

Deleted User wrote: »

It equates to a mark down of €6,000 a year for 4 years. How much extra will people have in their pockets in reality? At most, between €25 and €100 a year.

You suck at maths.

Even if it was 25-100 a year, that would be money circulating in the economy rather than leaving the country, which would increase demand and spur economic activity

karlth

Phoebas wrote: »

You completely disregard Icelandic bank's debt, which greatly exceeds their assets. They just don't have the money to fund this.

These are the old banks (bad banks) that went bankrupt. They had a lot of assets and even more debt. Those banks are now in receivership and they are the ones being taxed. The new banks are taxed as well but because they are many times smaller their contribution is much smaller.