THE PRESIDENT of Iceland Olafur Ragnar Grimsson has said that a joke linking his country’s economic difficulties with those of Ireland, which circulated in financial circles in London at the height of the banking crisis, was “just a recent example” of the “arrogance of the British”.
The joke – “What’s the difference between Iceland and Ireland? One letter and six months” – implied that Ireland was facing an economic collapse as severe as the Icelandic crash.
Iceland’s economy collapsed in 2008 after the failure of its three biggest banks, and was the largest suffered by any developed country, relative to the size of its economy.
Speaking to The Irish Timesat the Davos summit, Mr Grimsson said Ireland and Iceland had many things in common through history. "We have both in our histories experienced the arrogance of the British – it [the joke] is just a recent example of that," he said. "People in London should worry more about the future of London as a financial centre and the economy in Britain, and how that will fare in the future and their own problems, than playing jokes about Iceland and Ireland."
Mr Grimsson described as “a financial terrorist act against Iceland” the UK’s decision in 2008 to use anti-terrorism legislation to seize deposits in Britain owned by one of the Icelandic banks. “They put the government of Iceland and our entire economic system formally on the published list on the treasury website together with al-Qaeda and the Taliban. It was more a political or cultural insult than a financial act of aggression. For centuries Gordon Brown will be remembered in Iceland long after he is forgotten in Britain.”
Mr Grimsson said there was widespread anger among Icelandic people over Britain’s move. This contributed to opposition to the Icelandic government’s decision to repay €3.8 billion owed to the UK and the Netherlands for deposits lost in the collapse of one of the country’s three major banks, he said.
He refused to sign an amendment approving the payment, fearing its long-term impact on the economy. He said it is right to put the deal to a referendum due on March 6th, given the costs already faced by the Icelandic people. The money will eventually be paid, he said, but the terms of the deal may have to be renegotiated.
“There is a limit to how much you can ask taxpayers to pay due to irresponsible, greedy and risky operations by bankers in a foreign country,” he said. Western democracies had through years of “extraordinary economic growth somehow fundamentally forgotten that premise of our democratic system – that we have to be guided by the will of the people”, he said. “We have not been chosen to be masters of the financial universe. Presidents, ministers, governments are there to serve the people, not the financial markets.”