Follow @PoliticsIE
 
 
 
Page 1 of 3 123 LastLast
Results 1 to 10 of 26

Thread: Icelandís debt write downs cleared a path to recovery

  1. #1
    Politics.ie Member
    Join Date
    Aug 2011
    Posts
    498
    Mentioned
    0 Post(s)

    Default Icelandís debt write downs cleared a path to recovery

    Iceland

    Interesting read note the important part...

    In late 2009, after heated debate, the government, the financial sector, and the business federation agreed on a comprehensive debt-relief programme for firms and families. The main components were: firstly, for the household sector debt in excess of 110 per cent of the fair value of each property was written off. Specific relief measures (administered by a bank or a new debtorsí ombudsman) were put in place for those that could not service a reduced loan.

    Secondly, low-income, asset-poor households with high-interest mortgage payments got a temporary subsidy from the government.
    Thirdly, small- to medium-sized firms could apply for debt relief if they could credibly document positive cash-flow from future activities. The firm had to be willing to re-engineer its operation so as to make best use of its assets.



    Ireland took the wrong path by putting the debt on it's citizens and not offering help to those who need it. Hence the pathetic state of the economy right now. FF sold us out, now FG carry on selling us out to the banks and ignoring the problems and not offering help.

    Iceland took bold action, it worked and now they have bounced back. Meanwhile Ireland (who's problems started before Iceland) is crapping along at the bottom with a dead domestic economy, huge debt burden, vast numbers of people in negative equity, big tax hikes and the poorest people have even less than they did. With little prospect for any substantial recovery (and a ropey outlook for most of the EU) there was a way to deal with this problem. Debt write downs across the board, help for those who needed it.

    Result an economy that is put back into shape fairly quickly. But don't expect FG to actually admit they are on the wrong path or their austerity drive isn't working (it's def not working we all know that) More of the same kill the patient medicine that isn't and has not worked.

    Even the IMF know they screwed up big time. Bank debt is not people debt, we're not a charity and we've been made to suffer to save the banks.

  2. #2
    Politics.ie Member General Urko's Avatar
    Join Date
    Oct 2012
    Posts
    15,682
    Mentioned
    0 Post(s)

    Default

    The OP, in fairness to the 2 major political parties in the state, has not mentioned the Labour party's collaborationalist role in continuing the destruction of our economy, nor that come to think of it, of the unfortunately up and coming again, The Ecology Party Of Ireland (Greeners)!

  3. #3
    Politics.ie Member jackryan's Avatar
    Join Date
    Aug 2008
    Location
    Dublin, but lived in Tipp, Limerick, Kildare, NI, UK & USA
    Posts
    3,681
    Mentioned
    0 Post(s)

    Default

    Doesn't look to be doing the ruling government in Iceland any good heading for a thumping in the forthcoming elections with the old parties coming back again, so life mustn't be that great there?

  4. #4
    Politics.ie Member
    Join Date
    Aug 2011
    Posts
    498
    Mentioned
    0 Post(s)

    Default

    I've given labour plenty of stick for being the "accomplice" to FG's policies. I think that it is well known the party is virtually wiped out with little grass roots support.

    All I know is this, Iceland did a whole better job of their mess than it has here, ie not dealt with. Same FG mantra about no universal write down, no help for those in distress left to the mercy of the banks.

    And the economy is a sad pathetic state and will be for many years. Despite the low corporation tax, the populace has suffered through ill advised austerity that has clearly not worked.

    Yet they carry on regardless

  5. #5
    Politics.ie Member
    Join Date
    Jan 2011
    Posts
    4,281
    Mentioned
    0 Post(s)

    Default

    Quote Originally Posted by Normal Lord View Post
    Ireland took the wrong path by putting the debt on it's citizens and not offering help to those who need it. Hence the pathetic state of the economy right now. FF sold us out, now FG carry on selling us out to the banks and ignoring the problems and not offering help.

    Iceland took bold action, it worked and now they have bounced back. Meanwhile Ireland (who's problems started before Iceland) is crapping along at the bottom with a dead domestic economy, huge debt burden, vast numbers of people in negative equity, big tax hikes and the poorest people have even less than they did. With little prospect for any substantial recovery (and a ropey outlook for most of the EU) there was a way to deal with this problem. Debt write downs across the board, help for those who needed it.

    Result an economy that is put back into shape fairly quickly. But don't expect FG to actually admit they are on the wrong path or their austerity drive isn't working (it's def not working we all know that) More of the same kill the patient medicine that isn't and has not worked.

    Even the IMF know they screwed up big time. Bank debt is not people debt, we're not a charity and we've been made to suffer to save the banks.
    Where do you think the money for the debt relief came from??



    The article includes this sentence but does not give it enough emphasis:

    Devaluation of the krůna doubled the nominal value of loans in foreign currency.
    A large proportion of Icelandic mortgages were exchange-linked loans. How would you fancy having a 200,000 mortgage in a collapsing economy and seeing it double to 400,000 because the currency also collapsed? Even after the 110% principle a lot of borrowers still owed MORE than they did prior to the crisis.

  6. #6
    Politics.ie Member seabhcan's Avatar
    Join Date
    Sep 2007
    Posts
    14,309
    Mentioned
    0 Post(s)

    Default

    Quote Originally Posted by Normal Lord View Post
    The main components were: firstly, for the household sector debt in excess of 110 per cent of the fair value of each property was written off.
    The iceland system is far from generous. The 110% figure ignores that Icelandic mortgages (uniquely) are linked to inflation. So if inflation is 4% (which it is) then the principle of your mortgage increase by 4% per year.

    In year 1, your mortgage is 110%. In year 2, its 114.4% + interest. In year 3, its 119% + interest. And so on. You're back to where you were very quickly.

    You have to pay off 4% per year plus interest just to stay where you are. On a 600k mortgage, that would be about 50k.

  7. #7
    Politics.ie Member Goa Tse's Avatar
    Join Date
    Dec 2010
    Location
    Abort Christ
    Posts
    2,277
    Mentioned
    0 Post(s)

    Default

    It'll never happen here.
    'I am not gay, although I wish I were, just to piss off homophobes.' - Kurt Cobain

  8. #8
    Politics.ie Member olli rehn's Avatar
    Join Date
    Nov 2010
    Location
    en garde
    Posts
    8,450
    Mentioned
    0 Post(s)

    Default

    Quote Originally Posted by Taxi Driver View Post
    Where do you think the money for the debt relief came from??



    The article includes this sentence but does not give it enough emphasis:



    A large proportion of Icelandic mortgages were exchange-linked loans. How would you fancy having a 200,000 mortgage in a collapsing economy and seeing it double to 400,000 because the currency also collapsed? Even after the 110% principle a lot of borrowers still owed MORE than they did prior to the crisis.




    Hey hey hey- what are you doing ?! This is exactly one point the dreamers of an Icelandic solution do NOT want to know...

  9. #9
    Politics.ie Member Analyzer's Avatar
    Join Date
    Feb 2011
    Location
    Northern Ireland - without forgiveness, there is dysfunctionality.
    Posts
    46,117
    Mentioned
    0 Post(s)

    Default

    What is the difference between Ireland and Iceland ?

    Ireland is getting more and more broke with every passing year.
    Coveney's ambition is the be Ireland's next EU Commissar and Ireland will pay a price as he builds his CV to position himself sufficiently loyal to the nEU empire.

  10. #10
    Politics.ie Member General Urko's Avatar
    Join Date
    Oct 2012
    Posts
    15,682
    Mentioned
    0 Post(s)

    Default

    If you go by the following article (written by an ace radickal feminist stirrer)

    Iceland: the world's most feminist country | Life and style | The Guardian


    It's becoming a hell on earth country to live in for both men and women! And we are going to become like it but from a coalition of mad rad fems and religious nutters!
    They have even been serious proposals there to make all Porn illegal!

Page 1 of 3 123 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •