It beggars belief: over eight years from a calamitous financial crash in Iceland, much to do with failed financial supervision, there is still reason to worry about financial supervision in Iceland. Or rather, there is again reason to worry now that the sheltering capital controls are for all intents and purposes abolished Iceland. All of this, according to the latest IMF conclusion.
Articles by Sigrún Davídsdóttir
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Until early this year it seemed unlikely that an extreme idea lingering for two decades on the political fringe could turn into a mainstream choice preferred by majority of British voters as happened on June 23. Ukip’s leader Nigel Farage declared victory: he has for decades championed leaving the European Union but that was only half of his political double bill.
“Corruption and the role of tax havens” was the headline of the annual workshop of the Tax Justice Network – and the word Luxembourg was heard quite often there. Two things are still playing around in my head: an exchange on the offshore bubble inside, not outside, of our Western countries – and the destructive role of Luxembourg when it comes to both taxation and finance.
Iceland is far from being corrupt in the sense that really corrupt countries are – judges and other public officials are not on the take, no such indication. But nepotism is a breeding ground for the kind of corruption that money bring.
Icelanders are catching their breath after an eventful week that it started with an infamous interview where the then PM Gunnlaugsson failed to tell the truth. The question is what more the Panama papers will expose of Iceland, the most offshorised country in the world. The political effects aren’t yet clear but the popularity of the Pirate party has grown.
What do Russia’s president Vladimir Putin and Iceland’s prime minister Sigmundur Davíð Gunnlaugsson have in common? Both have recently tried some pre-emptive damage-control measures before the material from a leak, administered by International Consortium of Investigative Journalists, ICIJ, is published.
The Icelandic government needs to decide on if to privatise the banks again and then how it should be done. Bjarni Benediktsson leader of the Independence Party has aired his idea that five percent should be given to the nation. The most famous example of a privatisation based on giving away shares was the rather notorious privatisation in Russia in the 1990s.
Iceland, as any other country, needs investment, i.a. in infrastructure and that will partly have to be financed by foreign loans. So who is then left to finance it? The Chinese, as the British government is so enthusiastic about.
Icelandic authorities ignored warnings before October 2008 on the expanded banking system threatening financial stability but the shock of 90% of the financial system collapsing focused minds.
A short aside to those who think it’s only the economy, stupid – well, at least this is not the case in Iceland.