Tuesday, October 07, 2008

More Iceland

Iceland took control Tuesday of one of its largest banks, pegged its currency to a basket of other units and said that it was seeking a €4 billion-emergency loan from Russia as it struggles to keep its economy afloat.
Russia? I wonder what they'll want in return? Why would Iceland turn to them? Bloomberg reports:
Prime Minister Geir Haarde said at a press conference he was ``disappointed'' that ``we have not received the kind of support we requested from our friends.'' He declined to name countries Iceland may have approached for a loan, adding that the nation ``will absolutely not default on its foreign debt.''
I fear PM Haarde might be fibbing about not defaulting, there is just too much foreign debt. Nationalizing the banks just makes a nation of 300,000 responsible for $138,340,000,000 in foreign debt. I doubt most of those 300,000 were sharing the bounty back in the good ol' days, now they get saddled with the debt. Neo-liberalism is at its finest when it screws the pooch from both ends.


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