Axis of Evil Update.

Iraq, Iran, North Korea and Cuba. Ever thought the list was too short? A collection of old troublemakers who are well past their prime days of mischief making? Or maybe you just want a level in the next Call of Duty game set in an arctic environment?

Well today we get to add a new and unexpected contender to the Axis of Evil, so Ahmadinejahd and Kim Jong-Il better run for their money cos there’s a country holding the UK to ransom……..ICELAND!

Iceland is refusing to pay up £3.5 Billion to the British and Netherlands treasury. Icelands President Ólafur Ragnar Grímsson vetoed a Bill that would have repaid the debt, and there will now be a referendum in Iceland on whether or not to pay the money back.

The roots of Iceland’s debt crisis lie in an online subsidiary of the Icelandic bank Landsbanski. This online service was called Icesave and as it was internet only it did not have the same costs that other banks had and could offer higher interest rates that it’s competitors.
Many individuals in the UK and the Netherlands put their savings into Icesave to take advantage of these interest rates but more importantly so did many local councils in the UK. Icesave was consumed by the international crisis in banking last year, and savers were unable to access their money, resulting in the UK using anti-terror legislation to freeze (see what I did there) the assets of Icesave in the UK.

The UK and Netherlands Governments then secured the savings of individuals (and councils) in their countries by loaning £3.5 Billion to the Icelandic banking system. Unsurprisingly they expect to be repaid, and have used their clout in the IMF to demand Iceland’s tax base – ie Iceland’s workers – pay back this colossal sum at massive cost to Iceland’s public services. Iceland is a country of only 300,000 people which means that every man woman and child owes the world’s banks £116,000 each.

There is already massive opposition to repaying the £3.5 billion – a quarter of Iceland’s citizens have already signed a petition against the bill and supporting a referendum on the issue. Unlike many other countries in Europe the Left has managed to benefit from the collapse in capitalism.

The Left-Green Alliance saw it’s vote increase by 50%, and is now the third largest party in Iceland and in Government with the Social Democrats. That the Left-Green Alliance has only been in existence for 10 years makes their gains all the more impressive. In a blow to the Right, which cheered on the banking madness, The Independence Party which is the Icelandic equivalent of the Tories were also booted out of Government after being in power for 18 years.

Iceland will probably be demonised and isolated by the world’s Governments and Banks when it refuses to subject it’s population to pay off the fantastic debts that the banking system created, and which the vast majority of it’s population did not benefit from. While the loss of the cold hard cash is obviously a major concern for the worlds Banks what is a lot more dangerous is the political message being sent out from Iceland – that the workers of Iceland did not create the financial crisis, did not benefit from it, and should not be asked to pay for it.

The fact that the UK General Election will be fought on the basis of who can cut the deepest into public services, it is very dangerous for the Tories and New Labour when another Government led by the Left will not repay money to the UK and bankrupt it’s people as a consequence.

After all, if they can do it…why can’t we?