The Citizen Movement which got four MP’s elected to Althingi in April has surpassed my best expectations.
I cast my vote their way as they seemed like a breath of fresh air against the staleness of the four parties that have ruled all in Iceland since I was born.
And they have not disappointed. They blog about their experience as MP’s and display the parliament in a curious light.
One of their MP’s Thor Saari just described how he and others walked out of a meeting held by the Economic, Tax and Business committees this morning where the representatives and head of the Financial Authority rejected Althingi’s request for the valuations of the assets of the old and new banks. Which makes no sense as the state is supposed to fund the refinancing of the banks for about 235 billion ISK. The executive branch simply expected the money to be granted without being informed properly according to Thor.
But the Citizens Movement has spoken for its first bill in Althing. It states that financial institutions are unable to go beyond reposessing people’s homes when the owners equity has dropped below market price. Currently, if you can only sell your home for 15 million ISK but owe 20 million, the bank can haunt you for the remaining 5 million for up to 15 years. This bill would enable people to drop the keys off at the bank, a situation known in several states in the US.
Until now, homeowners have been left with all the burdens of the economy so it only seems fair that lenders participate to some degree.
This is the first time ever that I am happy with my vote.
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The Economic Fugitive
2 years ago
YES! I’m excited to hear this – I hope their bill and their good efforts won’t be suffocated in the bureaucracy and corruption of Alþingi!
Bromley86
2 years ago
Not that I necessarily disagree with being able to drop off keys to cancel the debt, but that does mean that the New Banks would take the loss. That in turn means that the Icelandic taxpayer ultimately ends up paying.
The same with indexation, foreign exchange risk, etc. It is a zero sum game now.
Dadi
2 years ago
When someone who owes you $10 is not able to repay the money, lenders try to recover as much as possible. Getting 50% back is better than gettin 2% which is better than getting zero.
I think right now the situation revolves around damage control. How to minimize the damage. No nation recovers when its citizen’s have lost the will or reason to fight on. They must be released from the shackles before they can start rebuilding.