Iceland pushes ahead with controversial debt relief plan

Google – AFP, 1 December 2013

Prime Minister of Iceland Sigmundur David Gunnlaugsson speaks during a press

 conference after a meeting with European Commission President at the EU

Headquarters in Brussels on June 16, 2013 (AFP/File, John Thys)

Reykjavik — The Icelandic government said Saturday it would write up to 24,000 euros off the mortgage of every household, making good on an election campaign promise despite international warnings over the plan.

The cost of the measure is estimated to reach 150 billion krona (900 million euros, $1.2 billion) over four years, the government said in a statement.

It would be funded by taxes on banks and funds managing assets of banks which went bust during the 2008 financial crisis, added the government.

The Progressive Party -- led by Prime Minister Sigmundur David Gunnlaugsson, winner of late-April elections -- had won voters over with its campaign promise to offer household debt relief.

Gunnlaugsson has said since taking office that the scheme would not hurt public finances, and had initially suggested that foreign creditors of Icelandic banks would bear the write-off.

The debt relief promise has been met with scepticism elsewhere, with both the International Monetary Fund and the Organisation for Economic Cooperation and Development warning against it.

The IMF had previously said that Iceland has "little fiscal space for additional household debt relief", while the OECD had called for the mortgage relief efforts to target only low-income households.

Standard & Poor's also slashed the outlook for Iceland's long-term credit rating to negative from stable, saying the plan could damage foreign investors' confidence if it is to be funded by existing creditors of Iceland's banks.

The agency further warned that it could still lower Iceland's ratings over the plan.

But Finance Minister Bjarni Benediktsson swept aside the criticisms, telling public television Ruv: "We think that there is no doubt in the fact that this tax can be put in place. And if it comes under attack, we will defend it up to the highest jurisdiction."

Many Icelandic households are struggling to repay housing loans indexed to inflation that seemed safe prior to the 2008 financial crisis but has caused borrowing costs to skyrocket following the krona's collapse against other currencies.

"Currently, household debt is equivalent to 108 percent of GDP, which is high by international comparison," said the government in a statement.

"The action will boost household disposable income and encourage savings," it said, adding that the debt relief would begin mid-2014.

Related Article:

"The Recalibration of Awareness – Apr 20/21, 2012 (Kryon channeled by Lee Carroll) (Subjects: Old Energy, Recalibration Lectures, God / Creator, Religions/Spiritual systems  (Catholic Church, Priests/Nun’s, Worship, John Paul Pope, Women in the Church otherwise church will go, Current Pope won’t do it),  Middle East, Jews, Governments will change (Internet, Media, Democracies, Dictators, North Korea, Nations voted at once), Integrity (Businesses, Tobacco Companies, Bankers/ Financial Institutes, Pharmaceutical company to collapse),  Illuminati (Started in Greece, with Shipping, Financial markets, Stock markets, Pharmaceutical money (fund to build Africa, to develop)), Shift of Human Consciousness, (Old) Souls, Women, Masters to/already come back, Global Unity.... etc.) - (Text version)

“…  Government

Let us speak of government. We're not speaking of your government, but of any government - the way it works, how it survives, how it has survived, the way it campaigns, and how it elects leaders. It's going to change.

Years ago, I told you, "When everybody can talk to everybody, there can be no secrets." Up to this point on this planet, government has counted on one thing - that the people can't easily talk to each other on a global scale. They have to get their information through government or official channels. Even mass media isn't always free enough, for it reports that which the government reports. Even a free society tends to bias itself according to the bias of the times. However, when you can have Human Beings talking to each other all at once, all over the planet without government control, it all changes, for there is open revelation of truth.

Democracy itself will change and you're going to see it soon. The hold-outs, the few countries I have mentioned in the past, are doomed unless they recalibrate. They're doomed to be the same as they have been and won't be able to exist as they are now with everyone changing around them.

I mentioned North Korea in the past. Give it time. Right now, the young man is under the control of his father's advisors. But when they're gone, you will see something different, should he survive. Don't judge him yet, for he is being controlled.

In government, if you're entire voting base has the ability to talk to itself without restriction and comes up with opinions by itself without restriction, it behooves a politician to be aware and listen to them. This will change what politicians will do. It will change the way things work in government. Don't be surprised when some day a whole nation can vote all at once in a very unusual way. Gone will be the old systems where you used to count on horseback riders to report in from faraway places. Some of you know what I am talking about. Government will change. The systems around you, both dark and light, will change. You're going to start seeing something else, too, so let's change the subject and turn the page. …”