Iceland crisis

The trouble of British Councils
October 20, 2008, 12:44 am
Filed under: banks, Iceland, UK | Tags: , , , , , ,

Now many councils in Birtain have huge trouble ahead of them. Not only because many of them invested their money in to the Icelandic banks, but many companies are not paying their taxes:

The troubled retail giant Woolworths wrote to every council with a store in its area to announce that it was suspending payments of business taxes, known as national nondomestic rates, and cancelling its direct debits to councils. The company will move payments due in the last quarter of this year to after Christmas.

To the question why the councils were advice to invest their money has the LGA chairman Margaret Eaton said:

This isn’t the time for a blame game. This is an unprecedented situation, the extent of which could not have been foreseen. However, at the appropriate moment, there needs to be a full and independent inquiry to find out just how these banks continued to get relatively strong credit ratings until a few days before they went under.

May be Eaton could look back at her own prime minister, which had great impact. Darling said on Wednesday, Oct. 8:

“The Icelandic government, believe it or not, have told me yesterday they have no intention of honoring their obligations here.” Darling has not yet disclosed what official communication underlies his statement. On the Oct. 10, Gordon Brown, the U.K. prime minister, stated in an interview with the BBC, that “We are freezing the assets of Icelandic companies in the United Kingdom where we can. We will take further action against the Icelandic authorities wherever that is necessary to recover money.”

That day before, a telephone conversation took place between Arni Mathiesen, the Icelandic minister of finance, and Alistair Darling, the chancellor of the Exchequer. Mathiesen claims that nothing in this telephone conversation can support the conclusion that Iceland would not honor its obligation to insure its part in the deposits of IceSave, as stated in Icelandic law.

The clumsy way of communication of the British ministers and the way they wanted to get foreign guys to blame their own trouble has made the trouble even worse for the people that had money in these accounts. Compared with the solution that the Dutch government has made with the Icelandic one, where the Dutch people are guaranteed there money back, and only through one channel. But not just first to claim from Iceland and then from there own government.


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