Without social justice there is no future for Europe: Open letter to the EU institutions from Iceland

Article by Dr. M. Elvira Méndez-Pinedo.

Associate Professor of European Law. University of Iceland. 


These days 317.593 Icelanders have learned the hard way all about the internal market of financial services. They have all become specialists in European law, free movement of capital, free provision of financial services and the European Directive for  the minimum guarantees of deposits. After 9 months of strong and fierce national debates, and deeply worried about their  economic independence, sustainaibility and future, 25% of  voters have requested a direct participation to approve the bilateral agreements negotiated by their government with the UK and Holland for the reimbursement of the national debt. In my view, these so called Ice-save dispute and agreements have to be considered under the light of:

-          The principles of State liability for breaches of EU/EEA law and non-discrimination.

-          The  European integration, the EU and the EEA Agreement and the fundamental rights fof citizens within the internal market.

-          The responsibility and role of all actors in the aftermath of financial crisis: EU, Member States, private banks and financial institutions and general public.

-          The international economic system based on a neo-liberal  approach which freed capitalism of its social responsibilities.

-          The movement of global social justice activism born in 1999 (Seattle) represented by figures such as Noble prize winners Joseph Steiglitz, Amartya Sen and activists/writers such as Susan George and Naomi Klein.


My main thesis:

60-70% Icelanders against Icesave and EUThere has been an oversimplification of the responsibilities and factors which led to the financial collapse plus the attribution of debts to Icelandic sole liability. Responsibility is to be found at all levels: European/national, private/public, UK/Iceland/Holland and it has to be determined very carefully. It is essential from a social justice point of view. What Icelanders are requesting is simply to examine the nationalisation of private debt in the light of social rights, democracy, justice and rule of law promised by the Treaty of Lisbon and the EU Charter of Fundamental Rights. Without social justice there is no future for the European integration and the internal market.

Why do I defend this thesis? On the basis of the following arguments:

1. Analysis of the dispute in EU law and the EU internal market compared to a federal market:

-          It is acknowledged by many specialists of EU law that the State liability for a case of systemic bank failure is unclear in the EU Directive incorporated into the EEA legal order. The new EU Directive from 2009 still is unclear on this point. However, the principle of non-discrimination is essential in EU law. Consequence: in principle Iceland should honor its European obligations.


-          However, some essential elements should be analysed as they raise deep  ethical questions relating to fundamental rights of both citizens and States. Free movement of capital and free provision of financial services across 27/30 countries was achieved in the 90s without a proper system of supervision, collaboration and assistance between EU/EEA Member States in cases of financial crisis. No obligation to help each other in cross-border situations, no role for European institutions, no role of lender of last resort for the European Central Bank. Supervision was decentralised at national level. Internal market was incomplete in this sense. Unfortunately for Icelanders, crisis has shown how this model was imperfect.


-          Financial consequences of economic crisis and banks collapse are now to be paid by the general public/tax payers in Europe without a proper examination of the sustainability of the whole capitalist system plus the responsibilities of public/private actors in the crisis. Once the system has been rescued,“ Business goes on as Usual“.


-          EU created internal market and rules but pretends not to have competence nor to be related to the cross-border problems that the financial crisis has created in the same internal market. This is a fallacy and is fundamentally wrong on the basis of EU law. The EU not only has the right to act, it has the obligation to do so. Otherwise it is failing the citizens who will hate the internal market and, by extension, the EU.

Citizens will hate the EU2. Analysis of the extension of the internal market to the EEA in the case of the Ice-save cross-border dispute . All these are proven legal facts:

-          Lack of participation of Iceland in the EU legislative process. No possibility to influence the rules to adapt them to the needs of a small country.

-          Lack of access to justice for Icelandic citizens before EU institutions and European Court of Justice.

-          Lack of justice for Iceland. Lack of European Court directly competent on the issue (ECJ/EFTA Court). Lack of international court for economic disputes.

-          Failure of EU and EEA legal systems in this respect and failure so far to reach a political solution which satisfies all parties involved in the dispute and, above all, Icelandic citizens and British/Dutch taxpayers.

3. Analysis of important reasons relevant to the dispute behind Icelandic protesters and  60.000 requests to the President for a national referendum on the Ice-save bill 2.


-          Is it fair that citizens pay the consequences of the European Union/EU/EEA Member States and private companies failures in the internal market?

-          Is it fair that the Icelandic State has to nationalise the debts risking bankrupcy and future sustainaibility in order to comply with European law and satisfy creditors under the strict surveillance of the IMF and being deprived of the legal rights under the European legal order?

-          Isn“it a basic principle of democracy: “no taxation without representation“? Should not tax-payers have a word in the economic governance of the internal market?


Iceland for sale4. Analysis of protests in Iceland.

-          Request by 60.000 voters  to participate directly in a decision that affects the economic sustainibility and the future of this small isolated country with only 317.593 citizens.

-          Protests during 2008-2009 in Iceland are deeply and logically connected with the movement of global justice activisms that asks for fairness in the economic governance of the world (Steiglitz, A. Sen, Naomi Klein, Susan George, World Bank, NGOs, etc).

-          A window of opportunity  to have a social responsible and new capitalist system in the whole world oppened in 2008 that is closing now: As global justice movement says: "Another world is possible" and we can make it happen only if stand up for it.

-          Otherwise the lesson of the  Ice-save dispute will be like the Principe di Salina said in the film “Il Gatopardo“ from Luchino Visconti: Something had to change so that all could remain the same......

5. When put in this perspective, Icelanders request to submit the new law on Ice-save to a national referendum is simply a request that the EU, EU Member States, Iceland, and even the IMF.... comply with the new Europe that has been promised to citizens:

- A request to advance from economic freedoms into fundamental rights and social justice in the reconstruction of the internal market of financial services. Social justice meaning a social contract or agreement between citizens, States and EU that all efforts will be done so that final debt will be paid by those responsible.

- A request to evaluate the ethical choice of nationalisation of private debt created by a greedy system of neoliberal capitalism that has freed companies, national and European administrations from their social responsibilities.

- A request to reconsider the Ice-save agreements in the light of European fundamental rights which are: democracy, rule of law, economic independence, sovereignty, solidarity between countries and future sustainability of Icelandic nation.


 You cannot change history. However,  Icelanders now have the choice not to surrender their dignity and protest a methodology of solving this dispute that has aimed to satisfy creditors and looked upon the location of responsibilities both at national and European levels.

Is the Icelandic revolution just the point of an icebergExceptional circumstances call for exceptional thinking, approaches, measures and solutions. No matter what the future departs, Iceland is still an independent nation with a voice. The Presidential decision to submit the entry into force of the new law to national referendum has  called world-attention. Icelanders need to stand together and get the world to understand their point of view. Icelandic referendum will affect the future of the European integration and the internal market. Social rights and social justice must be part of the Europe.

As Jacques Delors has pointed out (El Paķs, Dec. 2009), this  crisis has shown how Europe is missing a historic opportunity to show leadership in the world and lead the citizens into a better future. It is no wonder that President of the European Commission J. M. Barroso had a hard time in the European Parliament (EP) being re-elected for a second term. Critical and angry new elected Members of the EP accused him of creating a Europe for companies and not for citizens. In order to be reappointed, he promised 500 million Europeans a new "social Europe".

Lets go back to basics. European integration is for the benefit of us, common and ordinary people not only multinationals and international creditors. EU, are you listening to European citizens? This time revolts are in Iceland, next time it can be Paris, Madrid, Frankfurt, London, Brussels.....and it will not be thousands but millions of angry voices. Today three European Presidents, Von Rompuy, Barroso and Zapatero promised a new system of economic governance in Europe. I believe that the European integration can bring a better future for all Europeans, no matter where they live, in our out the EU borders. So here is the challenge for  you EU institutions: should not that new system include all of us citizens - or are we too small and ignorant to participate in deciding and financing our economic future?

mbl.is Telur ósanngjarnt aš lįta almenning greiša
Tilkynna um óvišeigandi tengingu viš frétt

« Sķšasta fęrsla | Nęsta fęrsla »


1 identicon


So good to hear a voice of reason.

Gķsli Halldór (IP-tala skrįš) 10.1.2010 kl. 11:57

2 Smįmynd: Kristinn Snęvar Jónsson

Thank you for taking interest in this matter.

Your conclusions should draw the politicians attention to the issues involved - if they are made aware of them and they read your article.

I think you are right that a crisis like this in Iceland now may be a good warning sign of what the European countries should expect in their own backyard in near future, maybe already this year. When the "ordinary" citizens there begin to realize what burden is being put on their shoulders as taxpayers because of state-subsidies which have been put into their own banking system and companies for their rescue and for the benefit of their owners and capital owners in general they are not going to like it. And, accordingly, not the prime actors in that disastrous play.
When they realize that the EU-regulations were not sufficient nor totally adquate and the controlling institutions within each country not capable of preventing the serious impact of the financial crisis in Europe they are bound to ask serious questions, to say the least.

Kristinn Snęvar Jónsson, 10.1.2010 kl. 13:02

3 Smįmynd: Žorkell Gušnason

Thank you so much for arguing this topic in our favour.  Your input is very important - and it is of great importance that all citizens of Iceland can understand what you have said and written.  

I believe that it would be in icelandic public interest if some able person (s) would join in and translate this for that purpose.

Thank you again and again.

Žorkell Gušnason, 10.1.2010 kl. 14:36

4 Smįmynd: Svanur Gušmundsson

Thank you for this.

Svanur Gušmundsson, 10.1.2010 kl. 14:46

5 identicon

Thank you Elvira. Your knowledge supports us all.

Žvķ mišur žį hlustaši Steingrķmur J. Sigfśsson EKKI į žig į borgarafundi ! Hefši hann gert žaš žį vęrum viš ekki ķ žessum vandręšum.

Ótrślegt hvaš Ķslensk stjórnvöld eru bśinn aš lįta kśga sig til hlżšni. Viš stefndum hrašbyr ķ žaš aš vera nżlenda Breta og Hollendinga.

Nśna stķga upp sérfręšingar śt um allann heim sem segja žaš sem žś alltaf vissir Elvira. Aš okkur beri ekki aš borga. Ķ žaš minnsta bara hluta af žessu. MIklu miklu minna en bśiš er aš setja ķ svikasamning Icesave.

Thanks !

Žröstur (IP-tala skrįš) 10.1.2010 kl. 15:42

6 Smįmynd: Gušmundur Jónsson

Skżr greining eins og įšur Elvira

Takk kęrlega.

Gušmundur Jónsson, 10.1.2010 kl. 18:14

7 identicon

Kęrar žakkir Elvira, fyrir upplżsandi, raunsęjan og réttsżnan mįlflutning.

Hjörtur Hjartarson (IP-tala skrįš) 10.1.2010 kl. 21:56

8 identicon

Mig langar aš efast um, aš žaš aš borga bara innstęšueigendum śtibśa į Ķslandi, feli ķ sér mismunun, sem žś viršist telja gefiš.
Įstęšurnar eru žessar:

1. Innstęšur śtlendinga sem eiga innstęšur ķ ķslenskum śtibśum eru jafnt tryggšar sem žeirra innstęšueigenda sem eru ķslenskir, meš rķkisįbyrgšinni. Grundvöllur/ešli misjafnrar tryggingar innstęšueigenda er žvķ ekki žjóšerni per se.

2.  Tilgangur žess aš tryggja innstęšueigendum innstęšur ķ innlendum śtibśum var ekki koma ķ veg fyrir tap į peningum per se - heldur aš koma ķ veg fyrir bankahrun. Aš tryggja hérlendar innstęšur til fulls taldist naušsynlegt til aš koma örugglega ķ veg fyrir bankaįhlaup. Ekki taldist nęgjanlegt aš tryggja ašeins hluta innstęšanna, til aš vera viss um aš nį žvķ markmiši aš hindra bankaįhlaup og koma žar meš ķ veg fyrir algert hrun bankakerfis. Mögulega hefši žetta takmark nįšst meš žvķ aš tryggja t.d. ašeins 90% innstęša - en alvarlegar afleišingar žess ef sś įgiskun myndi reynast röng réttlętir aš sś įhętta var ekki tekin, og innstęšur žvķ tryggšar aš fullu.

3.  Žessi almannahagsmuna-réttlęting er ekki fyrir hendi žegar kemur aš žvķ aš tryggja innstęšur ķ Bretlandi meš ķslenskri rķkisįbyrgš. Efnahagskerfiš žar rišaši ekki til falls, žótt innstęšur žar yršu ekki tryggšar aš fullu. Og vegna žess aš žessi réttlęting er ekki fyrir hendi mį ekki setja slķka tryggingu fyrir žeim innstęšum ķ lög į Ķslandi. Žaš žarf rök fyrir frįvikum af žessu tagi, og hér vantar rökin og réttlętinguna ķ öšru tilvikinu.
Žetta er grundvallarmunurinn į žessu tvennu. Žetta er ekki spurning um peningaupphęšir og hver įtti žęr, heldur mismunandi afleišingar hvorrar tryggingar fyrir sig.

4.  Žegar EFTA dómstóllinn kemst aš žeirri nišurstöšu aš žaš feli ekki ķ sér mismunun, og sé fullkomlega réttlętanlegt, aš setja lög um heft flęši fjįrmagns, žegar žaš sé gert til aš forša heilu efnahagskerfi frį falli, žótt undir venjulegum kringumstęšu sé slķkt bannaš - žį hljóta sömu almannaverndarsjónarmiš aš eiga viš į hvaša sviši sem er. Žaš getur ekki veriš aš ein og sama réttlętingin - verndun almannahagsmuna - gildi stundum og stundum ekki til žess aš vķkja frį almennum reglum um bann viš mismunun (réttlętingin hér er aš bjarga bankakerfi, og žar meš efnahagskerfi, frį falli).

Žess vegna get ég ekki séš aš lög gegn mismunun hafi veriš brotin.

Įhugavert vęri ķ framhaldinu aš skoša hver stašan hefši veriš ef hagkerfi beggja rķkjanna hefšu veriš sambęrileg, og aš efnahagskerfi hins rķkisins myndi einnig riša til falls ef ekki kęmu til fullar tryggingar innstęšueigenda žar.
En jafnvel ķ slķku tilfelli, žį sé ég ekki af hverju rķki ętti aš vera ķ žvķ hlutverki aš verja almannahagsmuni annars rķkis. Žaš hlżtur aš vera hlutverk hverrar rķkisstjórnar aš verja eigin almannahagsmuni. Ef ekki, žį skil ég ekki tilgang žess aš afmarka rķki yfirhöfuš. Žį vęri ķ rauninni bśiš aš žurrka śt hugtakiš “innlendir hagsmunir“, og žar af leišandi “almannahagsmunir“.

Svo er jafnvel hęgt aš taka žetta enn lengra, og velta fyrir sér žeirri stöšu ef hagkerfi Ķslands vęri ķ betri stöšu en śtibśsrķkiš, og ekki rišaš til falls, en hitt rķkiš aftur į móti (t.d. Fęreyjar) stęši frammi fyrir slķku falli, vegna svipašra kringumstęšna og hér komu upp.
Ętti Ķsland žį aš borga innstęšur aš fullu ķ hinu landinu?
Ég er alls ekkert viss um žaš.
Viškomandi rķki hlżtur aš eiga aš bera įbyrgš į aš tryggja sķna žegna fyrir įföllum, ef hugtakiš “almannahagsmunir“ į aš hafa einhverja žżšingu.

Sanngirnissjónarmiš vķsa žó alltaf til žess aš betur stęš rķki hjįlpi  žeim sem verr standa.

Ķ ljósi alls žessa, veršur ekki séš aš mismunandi tryggingar hérlendis og erlendis feli ķ sér mismunun - žótt hśn feli ķ sér mun.

gerdur (IP-tala skrįš) 10.1.2010 kl. 23:44

9 identicon

Varšandi 3. liš: Hér geng ég ķ raunar śt frį aš viš berum įbyrgš į almannahagsmunum žegna Bretlands - sem viš gerum alls ekki.
En žótt viš bęrum žį įbyrgš, žį er munur į aš vernda almannahagsmuni sem óvaršir gętu valdiš algeru hruni heils efnahagskerfis (hér Ķslands) į augabragši, og mun minni almannahagsmunum (Bretlands) sem varša fjįrhagslegt tap ašila sem veršur ekki til žess aš knésetja efnahagskerfi žeirra.

gerdur (IP-tala skrįš) 11.1.2010 kl. 00:38

10 identicon

En svo reyndu Bretar aš skapa žęr ašstęšur aš rök til aš vernda fall ķslenska rķkisins ęttu viš - meš žvķ aš hóta aš koma okkur į kné efnahagslega.
Og žaš tókst: Žaš eru žessar hótanir sem eru forsendan fyrir nśverandi settum IceSave-lögum (bęši gömlu og nżju).

En ašstęšur žegar įkvöršunin um žessa meintu mismunun var tekin, réttlęttu į žeim tķma bara aš tryggingar hérlendis yršu tryggšar - og var žvķ ekki mismunun.

Getur mismunun virkaš aftur ķ tķmann?

Afsakiš langlokuna, en ég er bara aš reyna aš fį botn ķ žetta, og vona aš höfundur bloggsins (eša einhver annar) geti sagt mér hvort, og žį af hverju, ofangreint er rangt athugaš hjį mér.

gerdur (IP-tala skrįš) 11.1.2010 kl. 01:08

11 identicon

Dear Geršur,

 Thank you for your long letter and comments. You are defending a legal position that Icelandic Government could argue before the European Court of Justice and I respect it because in a litigation case like this all parties have the right to argue the best they can their position. You have very good arguments.

I will read your mail again with great attention tonight. However, after having thought about it for a long time last June, and on the basis of the jurisprudence of the ECJ during 50 years which is a source of EU law, I have very serious doubts that this argument would convince the Court.

Why: because the doctrine of non-discrimination in EU law goes very deep, is incredibly wide and covers non only direct but also indirect discrimination. The Court looks at the facts and consequences in real life of legislation, not at the intentions or reasons behind the law. If figures and statistics show that a large group of people have been victims of a legislation and that this group shares common grounds such as nationality or sex.....,  the legislation is struck down.

 I cannot change this jurisprudence. I refer to you to the work of Christa Tobler which is an expert in indirect discrimination in EU law and to other classic books such as P.Craig and De Burca, from Oxford Univesity Press, 2007.

See for instance the jurisprudence Gebhard:

Principles established by the ECJ lately (non-obstacle approach):
National measures liable to hinder/affect the four fundamental freedoms:

1) must be non-discriminatory in theory or in practice (direct or indirect discrimination). There is no justification for discrimination whatsoever.

2) must be justified by public interest, imperative requirements, objective justifications.... all non-economic reason allowed in the general interest (whatever the name used by the EU Treaty or the jurisprudence)3) must be suitable to attain objectives aimed  at4) must respect principle of proportionality5) must respect European fundamental rights (newest test introduced by the ECJ)

M. Elvira Mendez Pinedo (IP-tala skrįš) 11.1.2010 kl. 10:37

12 Smįmynd: Jakob Žór Haraldsson

Frįbęrar greinar frį žér tengt Icesave umręšunni - innilega takk fyrir aš lįta žitt sjónarmiš koma fram!  Sérstaklega tek ég undir žaš sjónarmiš aš "social justice" sé eitthvaš sem Evrópubandalagiš verši aš taka alvarlega žegar žeir endursemja banka lög & reglur. 

kv. Heilbrigš skynsemi (fun.blog.is)

Jakob Žór Haraldsson, 11.1.2010 kl. 11:34

13 identicon

Can you tell us whether Iceland is regarded as a "third country" in relation to the directives 2000/12/EC and 77/780/EEC?

Björn Jónasson (IP-tala skrįš) 11.1.2010 kl. 12:26

14 identicon

Thank you so very much for answering!
And thank you for pointing out further information on the matter.

About 2) I stumble on "all non-economic reason allowed ..." mentioned here, since the EFTA court, which rules according to ECJ, and ECJ looks at them as well in their interpretations, has said in an opinion, that laws that “hindra flęši fjįrmagns" (don“t know the english), which is surely economic in nature, can be justifiable when a fundamental institution in society, as a bank system, is in danger of collapsing.

Furthermore, there is no personal characteristic that can be connected to the people who lost the money in England that is the reason for them not getting the extra insurance. It is not because they are white, black, of a certain nationality, female, homosexual, muslim or whatever. They might all be old Icelandic ladies, as this is concerned. The same applies to the owners of the icelandic bank accounts. It was not because the owners there were icelandic that they got extra guarantee. They might just as well have been rich arabs.

Any group can be found to have something in common, that separates them from another group. Here for example that their money was given less guarantee than the other group (which is of course the result of the decision, not the reason), and because of the location of the bank have a majority of certain nationality. You might even find that because of the type of the savings offered there, certain types of people or companies would have taken the offer rather that others, which would give them “common characteristics“ (old people, charity funds etc). The fact might also just as well have been that the owners of the accounts abroad were of Icelandic  nationality.
But the reason behind the decision was not because of the personal attributes of the account owners.
Even, if you had chosen the group at random, like give 20% of all bankaccount owners of the same bank extra guarantee, you might say that what they have in common is being every fourth on the list of the random system, and what separates them from the other.

As long as the court ruling doesn“t say that measures have to be taken randomly, there will most likely always be something in common with one group, compared to the other.
If I understand “discrimination“ correctly, that has to do with personal attributes, and decisions based on them.
And that is not the fact here.

gerdur (IP-tala skrįš) 11.1.2010 kl. 13:15

15 identicon

The question is really this:

Can the mere fact, not letting the same rules apply to local companies as to companies abroad, be a basis for discrimination - when discrimination has to do with personal characteristic of the bank account owners?
Am I not the same person, when I put my money in a bank in Iceland, and when I put my  money in a bank abroad?
Can putting my money in a bank account abroad, change my personal characteristics?
That doesn“t make sense.
Should the fact where I invest my money be used to define my person?
If so, the power of money has gone to far.

gerdur (IP-tala skrįš) 11.1.2010 kl. 13:49

16 identicon

I think I may perhaps have been taking somewhat too narrow aproach to the word “discrimination“. But I find it leading to the same results.

Would the differences that arise from the fact that customers, or company, in another country pay a different tax  (since paying according to their local tax law), from the tax paid by customers for their savings in Iceland - be considered discrimination?
As it turns out: No.
The rulings I find so far, considering differences that at first glance might be considered discrimination, are all in one direction:
You can have differences and deviate from the general rule of treating everybody everywhere the same, if they are justified by a greater good.
For example, differences in taxation between same company in different countries can be justified by the need of keeping a whole tax system intact.

The greater good of preventing collapse from a whole economy, must overrule any rules that might under normal conditions be considered discrimination.
And it is not justifiable to go further than absolutely neccessary - which resulted in depositors only in Iceland being guaranteed, and not abroad.

gerdur (IP-tala skrįš) 11.1.2010 kl. 14:58

17 identicon

We deviate from rules
to save an economy from collapsing
(by making a  normally forbidden government guarantee),

but then,

in order to comply with non-discrimination rules
(which are, of course, important too)
we make further government-guarantees -

which will result in the economy collapsing!?

Exactly the consequenses that were justification from the deviance in the first place!

Please explain how this can be right.

gerdur (IP-tala skrįš) 11.1.2010 kl. 15:28

18 Smįmynd: Maria Elvira Méndez Pinedo

Dear Gerdur,

 As I promised I thought again about your comments and talked to somebody about this and I have reached a further conclusion which I could argue quite comfortably.

 As you very well argue we could discuss wheter the need from saving a national economy from collapse authorised a country under EU/EEA law from treating differently deposits in Iceland than deposits of Icelandic branches in the UK and Holland. The EFTA Surveillance Authority will have to give a legal opinion on this isuse very soon. As this is a new problem in EU law I totally ignore how the ECJ or the EFTA Court would rule on this problem.

However, the point is that the UK and Holland and all other European countries seemed to do exactly the same than Iceland in the autumn 2008 to save their banking systems: they guaranteed the deposits in their territories.

By focusingn on territory they discriminated too. We could argue then that, by doing so, they have lost the right to raise this argument as a legal defense against us.

The point is that all countries acted for their citizens because the European system did not impose any obligations in cases of cross-border financial crisis. The supervision and security of the system was fragmented because EU law wanted it like that so it is unfair that Iceland is condemned in advance for something they all did.

 I would still have to find evidence in other EU countries about this.

And then we should hope that we convince all 25 countries that still need to be convinced! 

 Thank you for your comments, they made me reconsider my initial conclusion. Best regards, Elvira

Maria Elvira Méndez Pinedo, 12.1.2010 kl. 00:23

19 identicon

Dear Elvira.

Thank you.

Geršur Rósa Gunnarsdóttir

gerdur (IP-tala skrįš) 12.1.2010 kl. 09:55

20 identicon

Maria Elvira,

Thanks for your thoughtful contributions to the Icesave debate.

I thought I should share with you the following comments which I posted today to a trans-atlantic group of economists (Gang8) of which I am a founding member.

Gunnar Tómasson


I did detailed research into the formal/legal aspects of the UK actions in the case, beginning on October 8, 2008.

(The results were posted last July/August in ten or eleven parts at http://www.vald.org)

Such formal/legal aspects are of the essence when the rights and obligations of all parties to a case are defined with reference to applicable laws and regulations.

A Memorandum of Understanding agreed and signed by Icelandic and UK officials in October 2006 states that the “initiative” in compensating depositors in failed Icelandic banks lies with the Icelandic side.

That is, the private Deposit Insurance Fund whose legal and regulatory provisions were a matter of record at the time.

Beginning on October 8, 2008, the UK Government acted unilaterally to compensate Icesave depositors through the UK Treasury.

And, of course, the UK Government had every right to do so – and, as an afterthought, presented Iceland with the bill!

The question then arises:

Must the UK Government itself bear the cost of its sovereign action outside the applicable international formal/legal framework?

Gunnar Tómasson (IP-tala skrįš) 12.1.2010 kl. 16:01

21 identicon

What was the wording of the contracts given to the investors before they made their investment?

In those contracts, what was to happen if the investor's money were lost?


People lose money on investments all the time. Should any government pay back any of Bernie Madoff's investors?

Just because the UK and NL goverments decided to reimburse their residents who lost money in Icesave is no reason that Icelandic citizens should reimburse the UK and NL governments.


There are rules describing a settlement between the Icesave estate and their investors.They are in the investor's contract.

Changing the contract to fit a new reality should not be allowed if the world wants cross-border investment to continue.

Robert Gustafson (IP-tala skrįš) 12.1.2010 kl. 18:33

22 identicon

If this discrimination issue is so deeply important that it has judicial effects even in indirect sense, why does it then not matter that the icesave debt made by the private company will cost one Icelandic citizen around 12000€ and citizen from UK or Netherlands around 50€. If the discrimination law is so strong and stands above other laws in this matter, wouldn“t it be most fair that Iceland, UK and Netherland share the debt in a way so the amount for every citizen in these 3 countries is the same? And shouldn“t it especially be so if there are laws that state that the responsibility for supervising the private businesses lies not within only one of the countries, or if the laws on that issue are unclear?

Aušur (IP-tala skrįš) 12.1.2010 kl. 20:50

23 identicon

Oh, I“m sorry Elvira, I forgot to thank you in my comment above for your wonderful work.  I am very grateful and think many are, both in Iceland and Europe as whole.

Aušur (IP-tala skrįš) 12.1.2010 kl. 20:54

24 Smįmynd: Jślķus Björnsson

The EU Directive of the deposit assurance system refers to solidarity amongst the competing branches in the same Member State's territory. Also with the emphasis on the saver both as a consumer and founding.

All the Member States them selfs in their competition internal do they not apply to the same solidarity under the Commission? 

The Icelandic version renames depositor with the owner of the deposit. After reading the French EU constitution I have the feeling this is not the only example of such an uncompatibilty.

Also the EU law defined Comission is refered to as comite with same respect as to the 350 consultatives ones  with mandate[commission] from their Member state.

I reckon Iceland sufferes from this lack of discipline and accuracy. I ask me self how can my people establish serious conventional contract deprived perspective as mastering the principles?

Discriminations of countries in competition , also branches in competition. The claimer of a territory must be responsible for its supervision, he can not transfer the charge to claimer  of an other territory. That is like the stork and the fox.

Jślķus Björnsson, 19.1.2010 kl. 03:29

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