Iceland -“bankrupting yourself to recovery” -Nobel economics laureate Paul Krugman

Un-flipping-believable!!!

Iceland Sets Sights on Euro Even as Bloc’s Debt Crisis Deepens

By Marianne Stigset and Omar R. Valdimarsson
May 16 (Bloomberg) -- Iceland is determined to join the euro as soon as it meets the bloc’s criteria for the currency switch, Foreign Minister Ossur Skarphedinsson said.

The Atlantic island, where krona losses helped generate a trade surplus that carried the economy out of its 2008 banking meltdown, will target the currency switch once it gains European Union membership, Skarphedinsson said in an interview in Greenland’s capital Nuuk.

Iceland is underlining its commitment to the euro as European finance ministers meet in Brussels for the latest round of talks to tackle the currency bloc’s debt crisis. Euro-skeptic parties in some of the region’s AAA rated nations including France and Finland have won support as voters balk at the prospect of funding more bailouts that many investors say may fail to prevent defaults.

“The top shots in the EU are busy trying to work out these problems,” Skarphedinsson said in the May 12 interview. “I have full faith that they will be able to do so.”

Iceland started EU accession talks last year and would need to wait about six or seven years before euro adoption could be achieved, Skarphedinsson said. Accession remains attractive even as the region’s debt crisis deepens because the turmoil is “a temporary situation,” he said. “I’m not too worried -- by then they will have sorted this out.”

Iceland’s financial collapse more than two years ago sent the krona tumbling 80 percent against the euro offshore after the island’s biggest banks were unable to secure short-term funding. The government took control of the lenders, splitting the foreign and domestic assets, heaping losses on international bondholders while maintaining local deposit and payment facilities.

EU Backbone
The central bank then imposed capital restrictions to stem the krona selloff that ensued. The measures were in contrast to those taken in Greece and Ireland, where EU bailout terms dictated bondholders be protected and euro membership prevented the trade benefit of currency depreciation.

Nobel economics laureate Paul Krugman has praised Iceland’s model, calling it “bankrupting yourself to recovery” in a Nov. 24 New York Times column. The island’s currency decline transformed at least six years of trade deficits into a surplus one year after its banks collapsed.

Still, Iceland might have fared better if it had been backed by the EU, Skarphedinsson said.
“The hard efforts that the EU is undertaking to shore up the finances of those countries in dire straits show that it is better to have the EU as your backbone than not,” he said.

Iceland’s economy will expand 1.5 percent this year and 2.6 percent in 2012, the Organization for Economic Cooperation and Development said in its latest set of forecasts in November. Ireland’s economy will grow 0.6 percent this year and 1.9 percent in 2012, the European Commission said on May 13. Greece’s economy will contract 3.5 percent in 2011 and grow 1.1 percent next year, it said.

To contact the reporters on this story: Marianne Stigset in Oslo at mstigset@bloomberg.netOmar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net.
To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Tasneem Brogger at tbrogger@bloomberg.net
Last Updated: May 15, 2011 20:01 EDT

"overseen by a new Treasury Board president " -the buck stops WHERE?

Executive Summary

If the government is not following the constitution .... what rules ARE they playing by?

 

Dear Mr I. & Editors, 

 

Within your Sunday 15th piece, Four challenges that could keep Harper up at night, I spotted a reference to my "favourite" topic - the anti-constitutional usurpation of the Executive Power's (1867, ss9-16) Privy Council (s.11) by the Legislative Power (ss.16-57).

 

"That will mean significant cuts ..., overseen by a new Treasury Board president ... in cabinet."

 

Further to the point you raise --

 

How can any Privy Council Treasury Board President "oversee" the Finance Dept:

 

a) when all are under the control of the same iron-fisted Rt Hon PM;

b) the individual holding the constitutionally "lesser" position has more political-oomph than the "greater one";

c) no one in cabinet, the Executive, the Legislative, the Judicial or the 4th column (never mind the blindly-trusting, benignly-neglectful public) seems to know (or care) that the government of Canada is not following the as-written BNA/Constitution Acts?

 

Indeed, how can any officer of the Privy Council, give any independent advice to the Governor General when the day-to-day Privy Council (vis a vis the complete Council), is wholly populated by members of the same cabinet-government-of-the-day that the Privy Council was intended to "check & balance"?

 

My essential point:

 

--If the government is not following the as-written text of the Constitution, what authority (beyond force & of course public nescience) do they have to act?

 

The quintessential point:

 

- If the government is not following the constitution .... what rules ARE they playing by?

 

 

Reverse aspect on same point:

 

--Did not Mr Harper ask some "Privy Council Office" administrator to fall on his/her sword as the patsy for the security clearance screw-up regarding Mr Bruce Carson?

--when in fact, due to PC 1940-1121 Mr Harper controls the Privy Council?

 

and despite the fact it was mid-election time, when any RT Hon PM is at his/her least powerful ......no press, no pundit, no Justice official pressed Mr Harper on the question of the buck stops here responsibility!

 

 

AGAIN ...

If the government is not following the constitution .... what rules ARE they playing by?

 

I attach the Order in Council (ed note; see pdf at bottom of linked page) that allowed this 'bloodless coup' by the Rt Hon Wm L M King that was accomplished in the brief period between the death of Lord Tweedsmuir & arrival of Lord Athlone in 1940 under cover of wartime expediency -please read the temporary & emergency nature of the "need" to merge the workload.

 

This Order in Council, P.C.1940-1121, prepared, recommended by Mr King and approved by Mr King & his Council on March 25, 1940 (effective March 23, 1940) was step 1 in Mr King's revenge for Lord Byng's refusal of a dissolution in 1926, (step 2 was the successful lobbying to switch to the appointment by the Monarch of a "Canadian" of the Cdn PM's choice as GovGen rather than the recommendation of the UK PM).

 

and again.... If the government is not following the constitution .... what rules ARE they playing by?

 

Recommendation

 

As citizen of Canada and as subject of the Canadian Crown in Right, I invite you to join me in an urgent recommendation that we immediately revert back to the as-written provisions of our foundational documents before any more excesses of power come to pass.