Iceland is now in the middle of an intense argument with the Netherlands and England. The feud is over savings that Dutch and English citizens lost in now bankrupt Icelandic banks. England and the Netherlands want to be reimbursed for having bailed out their citizens who lost money.
Iceland feels that it has no obligation to either country’s citizens as the banks that lost their countrymen’s savings were PRIVATE. Each bank had paid into insurance (Similar to FDIC) according to European law.
Iceland is not exactly a wealthy nation. They have a couple of things that produce most of the country’s income: fishing and geothermal energy. Anything else available to make money is rather small-scale. The amount they owe is in the high billions of dollars. Icelanders do not feel they are obligated to England or the Netherlands in any way. They feel the depositors put money into high yielding bank accounts knowing there is always a risk wherever you stick your money. They can’t understand why they are responsible for the liabilities of the private bank that sold the accounts.
What’s even more interesting is that by publicly repudiating any liability for English and Dutch savings accounts, Iceland is in essence an example of a nation who has defaulted. The result of not paying off these two countries is that nobody is lending them money. They seem to be doing quite well. Recall that the argument for bailing out banks in this country and, in Europe, some underperforming nations, is that it would cause massive economic upheavals and/or a great depression. Perhaps this idea needs more investigation?
Interested in more? Try reading: http://john000.hubpages.com/hub/Iceland-and-Icelandic-Banks-in-Debt-Financial-Crisis