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[POLITICS] We do live in interesting times, indeed

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Apr. 10th, 2011 | 12:09 pm
mood: awakeawake

We do live in interesting times indeed: although the final results are not yet available, it looks as if Icelanders have rejected the second deal hammered out by the Icelandic, Dutch and British governments concerning the question of whether the Icelandic state should be required to reimburse Dutch and British savers who lost their money when the private Icelandic banks collapsed as well.

It's too early to say what this'll mean. Various sources note that the matter will now by referred to the European Free Trade Association Surveillance Authority; what the outcome of that'll be and whether Iceland will end up paying (or how much), I couldn't possibly attempt to predict. It remains to be seen whether the rejection of the current deal was a good choice, financially speaking, but one way or another, it was the Icelanders who decided now – the people who would've been required to actually pay the money over the course of more than an entire generation –, and THAT is a good thing.

Quite a few people have talked about representative democracies before the referendum and expressed their opinion that since Icelanders elected their current parliament, it is not their place to decide political matters anymore, but I disagree. The people are the ultimate authority in a democracy, after all; the parliament is merely tasked by the people with helping out with reaching and making decisions. And normally, this means just leaving things to the parliament entirely, like a CEO might leave smaller issues to his assistants and his team instead of micromanaging everything himself; but when it comes to such important matters, it is fair that the people themselves should decide what their fate will be. Anything else would be undemocratic in the truest sense of the word.

Anyhow, I'll certainly be watching how things develop there now; it'll be fascinating, no matter how it all plays out in the end.

Here's some press coverage, too (I'm not too happy with Guardian's headline, though, since the question of whether there is a debt owed in the first place is one of the things that people are debating):

US-American media have not picked up the story yet (the NY Times, LA Times and Washington Post, at least); probably understandable given that everyone's still asleep in the USA. *s*

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Comments {4}


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from: mondhasen
date: Apr. 10th, 2011 01:16 pm (UTC)

When our credit union system collapsed it was up to the rest of us in RI to bail out the losers. My dad was furious over this because having lived through the Great Depression he was of the opinion that if you wanted your money safe you put it in an FDIC insured account, not some sleazy CU. He figured that the reason the credit unions were offering higher interest here, and why people gambled with their investments, was that they weren't Federally insured. Regardless, a lot of people lost a lot of money.

Says the local rag...

Myself, I say "Power to the People." My elected officials are there for the mundane tasks of raising their salaries and hiring their friends' children for political plum positions, and giving staffers huge increases in lean times. *snicker* This guy is one of my fraternity brothers. When matters of State arise, like whether or not we get a casino, they usually defer it to a referendum vote (I think this is so they can avoid taking a true stand on a position ;o)

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from: schnee
date: Apr. 10th, 2011 01:55 pm (UTC)

*noddles* I can understand your dad. It's not necessarily a comparable situation, of course, but the argument made by the "common man" in Iceland that *he* is not responsible for the whole mess, not even indirectly (the banks were private, after all) is understandable: under the proposed agreement, every single last Icelander would have had to pay more than 12,000 EUR over time. Imagine that banks in the USA collapsed, and foreign nations would demand reimbursements to the amount of about 5.5 trillion dollars; I'm sure people would be rioting in the streets.

It also doesn't help that the UK, for instance, is a nation that's 200 times as large as Iceland. It'd be much easier for them to be generous here than it would be for Iceland to come up with the money. But of course, the UK and Iceland seem to have a bit of a love/hate relationship ever since the UK tried to harvest the fish found in Icelandic waters (which led to the so-called Cod Wars as Iceland gradually expanded its Exclusive Economic Zone to 200 nautical miles — the amount that is recognized by international law now, too).

I always thought that this was a good example of the same attitude: Iceland always was and still is heavily dependent on fishery, unlike the UK. Given that, and also given the difference in size etc., it's difficult to not see this as the UK essentially being the bully abusing the smaller kid, not out of cruelty but certainly with callousness, for personal gain.

Anyhow, as far as the Icesave dispute is concerned, in the end, it's all Realpolitik, and when you take a principled stand and end up being punished for it, have you really won?

And as for referenda in general, I think it's not necessarily a bad idea depending on what the issue in question is. Of course some issues should not be debatable, such as whether all men are born equal (in other words, it should not be possible for the majority to vote away the rights of a minority, like California did with Prop 8 in 2008), but issues such as whether a casino should be built seem fair enough.

Of course, with referenda, there's always the issue that you're only asking current voters, even though the issue in question may affect others later on: people who're not old enough to vote yet, perhaps aren't even born. A legislature would, in theory, take this into account; in practice, of course, they're only going to care about those who'll be able to vote in the next election, too.

Anyhow, interestingly enough, referenda are often decried in Germany; in fact, any attempt to explore what the people actually want is usually decried as "populism". Perhaps it's due to the experiences in the Weimar republic and the rise of Hitler, but I personally think it's a pity, and a shame. As I said above, certain things are not negotiable, but I think for other issues, it would be good if people got to participate in politics a bit more (the same talking heads who always cry "populism" also regularly bemoan the people's disillusioning, lack of trust in politics/politicians, voter apathy and the like — gee, I wonder where that comes from), and I also think it's ironic that the word "populism" exists in a democracy in the first place, and is considered an insult for that matter.

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from: lupine52
date: Apr. 11th, 2011 04:57 pm (UTC)

I thought that when it came to a countries banks going belly up due to debt owed that the decison to recoop costs were burdened onto the debtee to decide whether or not they would have amnesty and waive the debt. At least I believe was the case with Argentina back about 10yrs ago. Not the private banks but the country went broke and some of the countries decided they would allow the country amnesty from their debts. The country is on better financial footing now as I understand.

Of course there is the other side of the coin too when you look at Haiti which is still endebted to France and is poor as all heck even before the earthquake. France has chosen not to have amnesty for the debt owed for the country parting ways so so many years back.

Thats the case at national level, at private level I figure that debt is paid selling by liquidating as much assets as possible and then a future lien placed against the balance.

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from: schnee
date: Apr. 11th, 2011 05:11 pm (UTC)

Yeah, I think that applies when the nation itself runs up debt, to the point where it either declares bankruptcy or where it simply can't pay it back anymore, realistically. But Iceland's different insofar as that the only thing that the country as such could be faulted for is insufficient oversight.

I think it would've been good of the UK and the Netherlands to simply say "OK, forget about it, we can't expect a tiny nation of 300k people expect to pay a couple of billion EUR for debt they didn't even incur", but of course, that was never realistic.

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