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Not So Cool Anymore: Iceland’s Meltdown

by Marquette Turner

in News & Views

Iceland is in serious financial trouble. In fact the country is close to bankruptcy and British Prime Minister Gordon Brown has announced that Britain is commencing legal action against Iceland to recover deposit monies for over 300,000 Britons.

As Australians it is hard to understand how bank deposits are not secure. How can you lose your money when depositing into a bank? A bank is not a credit union or building society so surely your money is guaranteed. Well this is not the case in many countries outside of Australia – in fact most countries throughout the world have not guaranteed bank deposits until now.

Iceland is a very small country of just 320,000 people. It’s six major banks have embarked on major expansions into mainland Europe and in doing so have taken deposits from foreigners and these deposits are not secured. Iceland has frozen bank accounts thus blocking people from withdrawing their money and the government has guaranteed deposits in full for citizens of Iceland but not those from abroad.

As a result of the global credit crunch and the implosion of the European financial sector, Great Britain has commenced legal action to recover money on behalf of its citizens and other European nations are set to follow. Iceland is in rapid meltdown – more than global warming experts could ever have predicted.

Michael Marquette

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