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Home > Blog posts > 2008 > 10 > No wonder no-one’s going to Iceland

No wonder no-one’s going to Iceland

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James Brockett

9 Oct 2008 | 12:56

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When I heard on the news that Iceland was going bust, I was quite surprised: their supermarkets always seem so busy and they have those excellent adverts featuring Kerry Katona. Imagine my shock, then, when I discovered that it was in fact the whole Scandinavian country that was going under, rather than the company of the same name.

Despite their economic woes, the Icelandic government have supported their own citizens by guaranteeing all domestic savings in their banks. But, disgracefully, they are refusing to do the same for the thousands of UK savers who have deposits in accounts such as Icesave. It’s fallen to our own chancellor to step in and guarantee this money on behalf of the UK taxpayer, even though our government has nothing to do with the transaction and we have our own banks to worry about.

As their country are shamelessly conning us out of a few million, can I be the first to suggest a boycott of everything Icelandic? Perhaps we should stop buying Bjork records or going on overpriced whale-watching holidays to Reykjavik where you pay £8 for a pint of beer. And we could keep the owner of West Ham hostage until they pay up.

Seriously, though, this episode says something about how governments look after their own when it comes to a crisis. Everything is more international these days, not only the financial system but also the labour market – millions of Brits live, work and hold assets abroad, and millions of foreign nationals do the same in the UK. But when it comes to the crunch, it seems that in many cases they won’t ever enjoy the same rights and protection as the citizens of a country. Which is why when the world economy hits the skids, migrant workers are expected to head back to their home countries, taking their money with them.

It’s a natural impulse in a crisis to be protectionist and nationalistic, but I’d like to think that in Britain we would take a different attitude to the Icelanders. We need to continue to welcome foreign investment and workers, and that means treating foreign money and labour as equal to our own. If foreigners withdrew all their money from the UK we really would be in trouble.

So let’s recognise that as an international community we are all in economic trouble, and not fall back on a narrow-minded nationalist mentality. Either that or invade Iceland – now there’s an idea!

Comments

1. At 14:40 on 15 Oct 2008, Tim wrote:

C'mon James, be realistic. Would the UK government cover all investments in UK banks and subsidiaries in all accounts wherever they are in the world? It is worth noting that the 50K security is made under the auspices of the FSA. To my knowledge, this only has jurisdiction in the UK. To be fair to Gordon (and Iceland and Ireland etc etc), you can't do much else because you dont want to guarentee what you can't regulate.
Economics is narrow minded. We are only in a global world because it suits us to be so - ask the French.
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2. At 21:33 on 22 Oct 2008, Roland wrote:

James, your article seems short on fact. Don't forget it was the UK Chancellor who brought the last remaining Icelandic bank down by using 'anti terror' legislation. Iceland has said it remains committed to honouring its legal obligations to personal savers. Thanks to the Chancellor, Icelanders will be paying for this for decades to come.

As this is an HR publication, perhaps you can enlighten readers with the HR implications of this awful set of circumstances, instead of trying to single-handedly whip up anti-Icelandic feeling.

Roland - Chartered MCIPD.
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