October 15 2008
UK MEP gets emotional about Iceland
Writing in The Times yesterday, Conservative MEP Daniel Hannan criticised Gordon Brown’s attitude towards Iceland in recent weeks in a impassioned column, published in whole below:
Shall I tell you the worst thing about this wretched business? Worse than the return of socialism, worse than the indenturing of our children? It’s the way we’ve treated Iceland, until last week perhaps the most Anglophile country in Europe.
To seize the assets of a friendly state was bad enough; to use anti-terrorist legislation was unforgivable. When the Crime and Security Act was passed in 2001, we were repeatedly told that it would be used only in cases of imminent danger: “If you’ve nothing to hide, you’ve nothing to fear.”
Nothing to fear, eh? Since then it has been invoked to eject a heckler from the Labour conference, to detain a woman walking on a cycle path and to prevent recitation of the names of fallen servicemen at the Cenotaph. Now this.
Gordon Brown claims that the expropriation was necessary because Iceland planned to default on British Icesave accounts. How he got this impression is a mystery. Iceland’s finance minister made clear in meetings with the British authorities that depositors would be paid. The Prime Minister, Geir Haarde, said in public: “We will immediately review the matter together to find a mutually satisfactory solution. We are determined to make sure that the current financial crisis does not overshadow the important and longstanding friendship that we have with the UK.”
Brown’s response? To seize the UK assets, not of the bank that ran Icesave, but of a wholly unrelated bank, Kaupthing, thereby collapsing it. Icelanders, who had been expecting to negotiate a guarantee to British depositors – eventually agreed on Monday – were stunned. They couldn’t bring themselves to believe that the leader of a country they admired would destroy their last solvent bank simply to give himself what Labour MPs have since called “his Falklands moment”. Except that Britain wasn’t the aggressor in the Falklands. To pick on a country with half the population of Wiltshire was cowardice, not courage.
For courage, ponder this message on my blog from an Icelandic fisherman who had saved up to attend university in Denmark. Suddenly, his savings are gone, his currency worthless. “We have lost our money, we may lose our economic freedom, but we will not lose our honour. Iceland will meet its obligations to the British people, no matter what. I will quit school and abandon my dreams, go back to my boat and work till my fingers bleed to play my part in paying off our debt.” Read those words, Prime Minister, and hang your head in shame.
Brown may have totally destroyed Iceland. The method he used was not necessary. Brown should be hanging his head in shame over this one.
Government set on collision course with Iceland over Landsbanki assets
October 16 2008
Also fro the Times
The Government has put Ernst & Young, the accountancy firm, on standby to step in as administrator of the UK assets of Landsbanki.
The administration would have huge implications for the embattled British high street because a large part of it, including the Icelandic retail group Baugur, is funded by Landsbanki and its Icelandic rival Kaupthing Singer & Friedlander, of which Ernst & Young is already administrator.
The problems surrounding the future of the Icelandic-backed stores groups is becoming increasingly politicised. Baugur employs 55,000 staff and City sources say a £100 million loan granted by the Bank of England to the struggling Landsbanki on Monday helped to give the bank sufficent liquidity to start relending to the British retailers that banked there.
The administration of Landsbanki would also have serious diplomatic repercussions for the already strained relationship between the UK and Iceland, which said yesterday that it would sue the British Government over the seizure of Kaupthing’s assets.
The Government’s call to E&Y at the weekend comes as the retail magnate Sir Philip Green seeks ministerial support to help him to buy Baugur, whose assets include House of Fraser, a stake in Debenhams and high street chains, including Whistles and Karen Millen.
It is understood that Sir Philip has approached Gordon Brown, Lord Mandelson, the Business Secretary, and Treasury officials to ask them to support his move for Baugur. He wants assurances that if he buys assets from the Icelandic Government he will not have to deal with the International Monetary Fund (IMF) if Iceland, as expected, turns to the IMF to stave off national bankruptcy.
Sources said that Sir Philip and rival bidders for Baugur’s assets – including Alchemy, Permira and TPG – fear that the IMF could try to claw back businesses sold by the Icelandic Government if the country went into default.
It is understood that Alan Bloom, an Ernst & Young partner, was asked by the Government to prepare to go into Landsbanki this week as administrator if necessary. Ernst & Young, the Treasury and the Financial Services Authority declined to comment on the standby appointment.
Mr Bloom and his team are already advising on the Kaupthing administration and the administration of Heritable bank, Landsbanki’s UK subsidiary.
On Monday the British Government lifted a freezing order on Landsbanki that was preventing all the bank’s corporate clients from drawing down more money on their overdrafts. Sources said the Government feared that restricted cash flow could put some retailers at risk of bankruptcy.
It is believed that the Government wants to seize and sell on Landsbanki’s assets to cover the £588 million of local councils’ money deposited in Icelandic banks and now in the hands of the Icelandic Government.
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