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The Icesave logo, advertising it as "part...

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Yesterday’s referendum in Iceland on whether or not to back back the UK and Netherlands after the collapse of Icesave in 2008, has been met with a resounding “no”. After 70% of ballots were counted, 57.7% were against, with 42.4% voting for repayment of debts. This is, without doubt, a huge embarassment to Reykjavik.

This referendum was the second of its kind. The first repayment plan was rejected and better terms for Iceland were negotiated. Under this second referendum, Iceland’s debt would be gradually repayed until 2046, at a three per cent interest rate on the 1.87bn euros it owes the Netherlands, and a 3.3.% interest rate on the remainder, which is owed to the UK.

This may be a “shock” for Johanna Sigurardottir, Iceland’s centre-left Prime Minister, but I would replace that with “disaster”. Economically, it is already in dire straights – it has been forced to accept a £2.8bn bailout from the International Monetary Fund (IMF). Prolonged uncertainty in the Icesave dispute can only hamper Iceland’s economic recovery. Its ability to borrow on the financial markets and further downgrade Iceland’s credit rating. Fitch is already calling it “junk” and Moody’s warned in February that it would follow if this referendum voted in a “no” vote. Anyone want to call them and check?

It would also prevent Iceland’s accession to the EU – with unanimity necessary in the European Council for permitting the accession of new states, the UK or Netherlands could easily prevent Iceland’s entry, just as Greece and Cyprus threaten to block Turkey’s. However, this should not be of major concern for the EU itself. Nice as it would be to have another rich, Western nation join the EU (one guaranteed to be a net contributor, if not at first), and a probable Eurozone candidate – we can’t escape the fact that only the Social Democrats in Iceland are in favour of membership. Can the EU suffer another Eurosceptic country joining the EU?

Danny Alexander, Britain’s Chief Secretary to the Treasury, has said “it now looks like this matter will end up in the courts”. Jan Kees de Jager, Dutch Finance Minister, claimed “the matter is now in the hands of justice”. If the case is to go before the European Free Trade Association (EFTA) Court, the process will doubtless be a lengthy one.

Great new post from The Currer Ball – and very true.

While the 1p off per litre is nice, it doesn’t really compensate for massive public spending cuts, does it now? And I’m waiting for the oil companies to pass on the costs…

The phantom budget Let’s say that the size of the average tank’s 16 gallons – that’s 72 litres. Let’s also say that the average motorist fills up twice a week. By those 2 generous estimates, George Osborne’s rabbit magicked from his top hat saves us about £1.50 a week – £78 per annum. And that’s assuming (wildly, some might say) that North Sea oil companies don’t take their £2 billion tax levy and hospital pass it to consumers. Meantime, millions of non-motorists p … Read More

via The Currer Ball

Voting has just begun in a week-long referendum amongst Southern Sudanese, on whether or not they should leave Sudan and go it alone.

Following decades of violence, it’s hard to see how the people of Southern Sudan will not vote for independence. As the deserts of the north make way for grasslands, forests and swamps of the south, the people change as drastically as the landscape. The predominately Arabic-speaking Muslim northerners are totally different from the tribal Christian or Animist southerners. In the north, 50% or more of children complete primary school, whereas this figure drops to closer to 1% in parts of the South. Infant mortality nearly doubles if you travel between Khartoum and Juba, capitals of each part of Sudan. Over 2/3rds of people in the northern Khartoum, River Nile and Gezira states have access to piped drinking water or pit latrines, as opposed to under 20% of southerners without any form of toilet.

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