Wednesday, January 6, 2010

Iceland's Democratic Values Must be Applauded

Via the WSJ:
Iceland's president vetoed a bill to reimburse the U.K. and the Netherlands for bailing out depositors of a failed Icelandic bank, throwing into question the international plan to rescue the island nation's banks and casting doubts on its bid to join the European Union.
President Ólafur Ragnar Grímsson on Tuesday cited massive public opposition in his decision to reject the bill, which was approved in late December by the Icelandic parliament after months of wrangling.
The veto was only the second time since Iceland's independence from Denmark in 1944 that a president used that authority.
Predictably, the British and the Dutch have reacted with anger:

The U.K. Treasury said Britain "expects Iceland to live up to its obligations."
"We are very disappointed about the decision," said a Dutch finance ministry spokesman. "Iceland has the obligation to pay back the money."
The bailout of international investors is a wealth transfer. It is right that people have a say in whether such a transfer of their money, for no fault of their own, is appropriate.
More from the article:
Almost since the onset of the financial-system collapse in October 2008, Icelanders have blamed a cadre of greedy bankers for turning a prosperous nation into an international economic pariah. There is strong resistance to piling debt on ordinary citizens to undo the bankers' mess. The bill would have seen Iceland repay the U.K. £2.35 billion ($3.79 billion) and the Netherlands [euro €1.32 billion ($1.89 billion) over 15 years. That amounts to nearly $20,000 for each of the 300,000 Icelanders.