The Iceland view

Ms. Helen draws our attention to a piece written by Hjortur J. Gudmundsson, an Icelandic free-marketeer, journalist, blogger, academic and opponent of the EU. In a short and concise piece in the EU Observer he explains the Icelandic view on the Icesave debacle and the outcome of the most recent referendum held in Iceland on whether or not Iceland could use government money (tax money, money that belongs to Icelanders that have nothing to do with Icesave) to repay the money Icesave owed the Dutch and British.

Almost 60 percent voted 'No' to an agreement that would have seen Icelandic taxpayers shouldering the responsibility of these debts, estimated at €11,875 for each of Iceland's 320,000 inhabitants, Gudmundsson writes. The result of the referendum was decisive with a turnout of 75 percent.

What is noteworthy, according to the author, is the fact that the British and Dutch governments have refused to solve the dispute in a legal fashion and have instead insisted on a solution through political negotiations. This refusal may lie in the fact that many legal experts have claimed that Iceland would most likely win using the legal route. In any case, the Icelandic people have always wanted the Icesave dispute to be dealt with in the courts. And now its looks as though they might get their wish.

But no matter how such court cases should go, it is highly doubtful that the results would serve the interests of London and the Hague or the EU, says Gudmundsson. If Iceland wins, the UK and the Netherlands quite simply will not get their money back. Well, not all of it.

If the UK and Holland do win, they still wouldn't get the money. But the jurisprudence thus created would carry the added 'bonus' of every single country in the European Economic Area (EEA) – which includes all the EU member states – would be responsible for all deposits in their private banks, both domestically and in foreign branches within the EEA, and would have a clear obligation to step in with their taxpayers' money if necessary. Even if this can be squared in a legal sense, it would wreak economic havoc.

Additionally, Gudmundson argues that more embarrassment may lie in store for the Dutch and British government, as well as the EUnion, as a series of court cases would inevitably shine a spotlight on how badly funded and insufficient deposits guarantee schemes in most European states really are as a result of EUnion legislation. The two governments as well as the EU would probably also have to make public a significant number of sensitive official documents related to the dispute and some of their other economic decisions.

And in the end, no matter the outcome, the EUnion would lose. Or, as Gudmundsson phrases it: "No matter how badly Icesave court cases could possibly go for Iceland, it would not be Reykjavik that suffers the biggest defeat".

No, that would ultimately be us, EUnion taxpayers, paying for the folly of our masters. 't Was always thus, and thus 't will always be. But too much of it has, historically, led to an ill, bloody fate for the rulers of the day. And history has a habit of repeating itself every so often

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