Sunday, January 10, 2010

Iceland President Warns British Leaders Who Behave in a "Versailles Mode" | LaRouchePAC

January 9, 2010 (LPAC)—Iceland President Olafur Ragnar Grimsson warned British Prime Minister Gordon Brown and Chancellor of the Exchequer Alistair Darling to be careful about the Iceland-bashing. "It is very important for Alistair Darling and Gordon Brown to realize that a few minutes after they speak to their audience in Britain, everything they say is being talked about in Icelandic fishing plants, and every village, and every office. We live in a global village where leaders in Britain can have a negative or positive impact on a referendum in Iceland," Grimsson told Britain's "Today" program. "If they want a constructive outcome of this dispute, they should be aware every sentence they say will have repercussions on the debate in Iceland."

Nothing has changed at Downing Street since the Versailles Congress 1918: the British government is behaving towards Iceland as it did with German reparations after World War I. The Financial Service Secretary to the U.K. Treasury, Paul Myners, has written a letter to the Financial Times making the point that it is "Important that this international agreement is honored." Apparently annoyed by the Financial Times opposition to the gunboat methods of the British government, Myners says: "It is very important that Iceland honors its international obligations and repays money provided by the U.K. to protect Icesave depositors." Myners argues sophistically that the repayment agreement allows Iceland to honor the debt without hampering its economic recovery, but does not move one inch away from his position. According to Myners, for Iceland to dedicate 4% of its GDP just to repay Icesave's speculative losses is fair! And this, at the same time that Iceland is promised EU membership, which means submitting to a 3% cap on deficit!

Myners' rantings are published under a letter pushing the opposite view, written by a Cambridge Fellow named Michael Waibel, who warns Britain that under EU laws, Britain has "no clear legal obligation to pay up." That in the best case, England has only 60% chance of winning its case. And even then, one should remember "the advice given by Elihu Root, a former U.S. Secretary of State and Nobel Peace Prize laureate, to James Brown Scott, his legal adviser: 'We must always be careful, and especially so in our relations with the smaller state, that we never propose a settlement which we would not be willing to accept if the situation were reversed.'"

Iceland's Economy Minister Gylfi Magnusson confirmed in Dagens Nyheter today that the government will probably resign if the referendum turns down their Icesave bill.

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