Europe

Lessons World Must Learn from Iceland Tackling its Financial Crisis

Published

11 years ago

June 15, 2013

Photo by Jed

People around the world are awakening, understanding their rights and realizing their powers, and so we are seeing a number of protests around the world against their government. The way people are heading to establish a more advanced level of democracy, our mainstream media still stays back, not so democratic.

When there were protests in Middle East, all the news media were active in covering the events, but when we saw protests in Iceland, Greece and now in Turkey, the media did not show that activeness. Since it is the fight for an advance level of democracy which demands for even more rights to the citizen, other governments are scared that this could encourage their own citizen as well.

Today what Turkey is demanding is an example of advance democratic rights and participation in development. Now people are able to tell their government what they want in their city and what not. Eventually government should work for their citizen and make them happy, but in Turkey government wants to make a shopping mall at the place of the Gezi park against the will of its citizen. People who were protecting the park launched a strong protest. However, government did not understand the demands of the people and instead started using force, tear gas, and in fact they declared that every protester will be treated by the police as a terrorist. Read More

What Iceland has done is so unorthodox for the management gurus around the world with textbook knowledge. It has gone against the belief of total capitalism, which is considered as the only successful way for an economy to burgeon by some. In 1991 when communist socialist economy fell down in Soviet Union, the capitalist world cherished. But today we are seeing that even capitalism is not the fool proof solution. Almost all the countries in Europe today are facing the similar problems: bankruptcy, austerity, etc. and the government should learn from what Iceland did.

In 2008 Iceland experienced third largest financial meltdown ever in the history. Iceland’s bank defaulted on $85billion. Icesave, an online savings bank operating in Iceland, the UK and Netherlands went bankrupt. The UK and Netherlands governments stepped in and bailed out their citizen who had their savings in the Icelandic bank. In total both the government spent nearly £3.5billion which they asked Iceland government to compensate. The ratio of debt to income surged to 240%. Soon the people in Iceland realized that the faith which they had put in their government resulted into nothing. Iceland Government came up with the plan that every citizen of Iceland will contribute to the payment of the debt to the UK and Netherlands. In a country of some 317,000 people, each person had to pay nearly 21000 euros monthly for the next fifteen years at the interest rate of 5.5%.

The people went out to the streets to protest. They dressed in orange and made a line in front of the police. Protesters made annoying sounds with kitchen utensils and stood really close to the guards protecting the parliament building and started at their eyes.

The protests resulted into the resigning of the government, bankers were jailed and banks were nationalized! Out of some 500 candidates 25 people were chosen without any political affiliation to remodel the constitution from the scratch replacing the old one which is said to be similar to the Dutch constitution. 1500 people were invited to participate in the assembly out of which 1200 were selected at random and 300 were representatives of companies, institutions etc. They belonged to all age groups from 18 to 88 spanning all six constituencies in Iceland. The new government decided that no one should stay in the parliament longer than eight years.

Iceland’s new challenge was compensating Britain and Netherlands for the money which they had used to bail out their citizen having accounts in Icelandic bank. It followed a referendum two times in Iceland which rejected the repayment plan both the times. Dissatisfied UK and Netherlands government approached the European court suing Iceland.

The success came to Iceland this year in January when European court cleared the Icelandic government closing the case in the favour of Iceland. The ruling halted the attempts made by the UK and Netherlands to get all their money back from Icelandic government. It was the victory for Icelandic people because they believed in any case, it was fundamentally unfair because the UK and Dutch governments had awarded compensation to their citizen far in excess of the levels required by European legislation.

As the new system in Iceland took over, the debt exceeding 110% of the home values was forgiven. The country eased the debt burden for over 25% of the population. The orthodox management experts were amused by what Iceland was doing, as it was going the unconventional way. It was actually helping its own people instead of banks like how other capitalist economies do. Critiques warned that Iceland is doing a big mistake, and their claims got solidified when in 2009 Iceland’s economy shrank by 6.7%. However as the time passed by and the government became stable, in 2010 its economy saw a rise in 2.9% and in 2011 it further experienced expansion by 2.4%.

Today Iceland is doing better than the rest of the European Union. It came out in the conclusion that helping your citizen and making them happy really works. Iceland doesn’t want to tie itself to Euro or join European Union now where governments cut to the people and give to the banks. In fact Iceland nationalized their banks. Iceland says if we were tied to Euro we would just have to succumb to the laws of Germany and France. Membership in the European Union imposes a lot of regulations, budgetary costs, and financial oversight that even the UK is considering the leaving option.

In Summary Iceland took the following revolutionary steps

Resignation of the government, imprisoning the responsible parties
Nationalization of the banks.
Referendum rejecting the repayment plan.
Appointing common people to rewrite the constitution.

Such a revolutionary change has changed the scenario in Iceland. The country’s economic situation was worse than Greece, but today its economy is stronger than any other European country which has seen financial crisis in the recent years.

The country is now implementing Participatory Democracy in Reykjavik as a model city where people decide where the development funds should go. The capital city of Reykjavik has also launched a direct democracy platform, where any citizen can drop few suggestions in a community forum about the things they want to be done in the city. The city council choses top five suggestions and process them in a month before taking the next five. Iceland is considering this system to be implemented in parliament as well.

Now the thing is what we can learn from Iceland tackling the financial bubble bursts. There is a lot to learn from Iceland for other countries in the world. Greece, which is undergoing a financial crisis and Turkey and Cyprus which are considering to join European Union must try something that should help their citizen first and then the banks or the demands of the EU. Turkish government, which is in a standstill due to #OccupyGezi protests, should understand that the people want the Gezi Park and it can’t force a museum or a shopping mall against the will of their own citizen. Instead of listening to the people the government is using tear gas against their own people which is banned in conventional warfare.

Similarly India, which is known for upholding human rights in the world the government treated the protesters who were doing yoga by caning and making them run away. Several massive protests in India against corruption and for bringing back the black money stashed in foreign countries failed and the government which now is facing multiple corruption charges is still enjoying its power as no one can shake their position even an inch. People must rise and governments must take lessons.

During all these events which happened in Iceland, international media’s role was negligible. Media should be more democratic, open and uncontrolled. Paid media showed us everything from Libya, but nothing from Iceland. Since what people did in Iceland can shake many corrupt governments around the world.

“Control Your Money or Your Money Will Control You Change your attitude toward debt. Every time you use credit for a purchase think,”Debt is slavery; I am making myself a slave.” – unknown

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Europe

Barcelona and Athens: cities that will leave an everlasting impression

Published

2 days ago

April 30, 2024

Andra Tudor

Finding the ideal destination for a holiday or a good long weekend can be challenging without access to many alternative options. Luckily, there are cities that need no introduction to know that they hold the solution; such is the case with Barcelona, in Spain, and Athens, in Greece, which you should always have at the top of your list of potential places to visit.

Barcelona, a city you’ll never forget

Barcelona is where you can find everything to make the most of your time and live unique experiences. Just go online and search for a city guide of Barcelona to review everything and start planning your trip.

The help of a good website

Tourism blogs and websites are an excellent alternative to virtually explore Barcelona and learn more about places to visit, public transport schedules, dining options, hotels and accommodations, and other useful information to make your visit more enjoyable.

The key lies in planning

With good planning, you’ll not only find splendid places to spend wonderful moments but also save money and get great recommendations to make your trip and stay enjoyable.

Park Güell: a must-visit

Barcelona stands out for its incredible attractions, among which Park Güell shines. Just read more about this interesting place to fall in love with it and make this visit mandatory.

What is Park Güell?

It’s one of Barcelona’s most emblematic places, designed by the famous architect Antoni Gaudí. Originally conceived as a housing development and later converted into a public park.

Architectural and natural elements

The main entrance is flanked by two modernist pavilions, with a staircase leading to the famous hypostyle hall and a central square with a panoramic view of Barcelona. Additionally, it features over 17 hectares of gardens, viaducts, and winding paths, integrating architecture with the natural landscape.

Cultural Heritage

Park Güell is part of UNESCO’s World Heritage and is classified as a Cultural Interest Site of Spain.

Athens: a journey to the past

Another city that will surely surprise you with its cultural and historical legacy is Athens, Greece, where you can enjoy impressive Hellenic ruins. It’s advisable to visit an Athens travel guide on the internet before you go to learn about everything and better organise your visit.

Historical richness

With over 3,000 years of history, Athens is the cradle of Western civilization and is home to ancient monuments such as the Parthenon, the Agora, the Acropolis, and many Greek temples.

Mediterranean cuisine

One of the main attractions of this city is its cuisine, which offers a delicious culinary experience of the Mediterranean diet.

Hospitality

Athens is known for its friendliness, and it is well-equipped to cater to tourists from all over the world.

The Acropolis of Athens

While in Athens, you have to visit the Acropolis, where masterpieces of Hellenic architecture are concentrated for you to marvel at their grandeur. Keep in mind that it is a highly visited site, so you should book now to secure access for your visit.

Beautiful architecture

Acropolis means “high city,” as it is located on a rocky outcrop in the city centre. Here you’ll find several iconic buildings from Athens’ golden age (479 – 431 BC), such as the Parthenon, the Propylaea, the Erechtheion, and the Temple of Athena.

Central location

Reaching the Acropolis is easy from any point in the city, so you won’t get lost. From there, you’ll have panoramic views of the city spreading out at your feet.

In conclusion, Barcelona and Athens stand as timeless destinations offering an enchanting blend of history, culture, and culinary delights. Whether exploring the iconic landmarks of Barcelona or delving into the rich historical tapestry of Athens, these cities promise unforgettable experiences for travellers seeking adventure and discovery. With careful planning and the aid of modern resources, embarking on a journey to these vibrant metropolises ensures a truly memorable escape.

Europe

National Police arrests 60 people for money laundering in Majorca

Published

3 years ago

May 28, 2021

Andra Tudor

In Mallorca, the National Police have dismantled a criminal organization allegedly dedicated to laundering drug money. According to preliminary investigations, those involved are alleged to have laundered more than one million euros over the last year.

At the moment, the authorities have arrested a total of 60 people for the alleged crimes of money laundering and false documentation. Although investigations are still ongoing, leading Spanish criminal lawyers have pointed to the possibility of an increase in the amount of money laundered.

In addition to this, specialists in Criminal Law and Financial Crimes such as Luis Chabaneix have pointed out that during the next few days the number of arrests could increase, both in Madrid and in Mallorca. It should be noted that of the 60 arrested, 55 were arrested on the island and the other five in the city of Madrid on Sunday, May 16.

Money laundering of drug money from Mallorca to the Caribbean

According to the founder of Chabaneix Lawyers, Luis Chabaneix, the 60 people who have been arrested by the National Police are being investigated for the laundering of millions of dollars. It is presumed that more than one million Euros from drug trafficking activities have been sent to Latin American countries such as the Dominican Republic and Cuba, and even shipments to the United States have been registered.

In these countries, the money diverted by the criminal association has been used for the purchase of real estate and vehicles. For this reason, the National Police is in permanent collaboration with the North American, Cuban and Dominican authorities in order to dismantle the activities of this group in the different countries.

Likewise, among the main information provided by the authorities, it should be noted that more than 400,000 Euros in cash were seized from the hands of those arrested in Mallorca. Similarly, the police searches carried out on the island led to the seizure of multiple luxury items and accessories, a total of three kilos of cocaine and approximately 60 kilograms of cutting substances.

Two Majorcan companies under investigation

The team of criminal lawyers with an office in Madrid has commented that there are multiple methods that can be used to launder drug money. In the particular case of the criminal organization headed by a nationalized citizen of Cuban origin, one of the methods used to divert the money was international bank transfers.

For this purpose, the use of linked bank accounts of certain front men was a fundamental element. In addition, the case includes investigations of split money transfers through call shops.

On the other hand, through an official statement, the National Police informed that two Majorcan companies have been linked to the ongoing investigation. The reason for this is the issuing of fraudulent invoices for a value close to 200,000 euros.

Through these methods, the criminal organization has managed to launder capital inside and outside the country, legalizing large sums of money allegedly originating from drug trafficking. Undoubtedly, the arrest of the 60 people involved, including the leader of the organization, is a serious blow to the laundering of drug money in Spain.

Economy

Seasif’s Franco Favilla discusses the post-Covid economy and the price of gold

Published

3 years ago

December 19, 2020

Andra Tudor

Although the Covid-19 pandemic isn’t over yet, there has been much discussion on the idea of a “post-Covid” economy, especially with the beginning of vaccination efforts in some countries. With markets throughout the world suffering the economic effects of the virus, experts have been looking towards the future –– and one of the topics that often comes up is the price of gold.

In August, the price of gold exceeded US$ 2,000 an ounce for the first time, driven by multiple factors. However, in November, advancements in Covid-19 vaccines led to a decrease in this trend, a result of the turbulent period we are going through.

“Regardless of the market volatility and the price changes that could occur over a given period of time, the fundamental fact is that the price of gold over the course of 2020 has reached an all-time high, and this, in my opinion, is very good news for the world economy,” explains Franco Favilla, founder and CEO of Seasif, a multinational company active in the extraction and trading of gold and oil.

According to Mr. Favilla, the main problem of the pre-Covid economy was the completely arbitrary nature of international finance. At one time, a ton of gold corresponded to a ton of currency, but since the 1980s, and at an impressive rate since 2000, the gap has widened enormously, so much so that today the relationship between the world’s currencies and gold is enormously unbalanced.

Total gold reserves around the world cover only 30% of currencies. This means there is nothing to cover and guarantee the value of money. In short, money has turned into a pure convention, a pure agreement between parties acting outside the market. Gold, on the contrary, guarantees democracy, because it protects savers and the market, offering an objective value for parameterizing every transaction.

“My hope, therefore, is that the crisis caused by Covid-19 will help to change finance, making it less ‘phantom’ and more linked to an objective dimension, based on gold, with obvious advantages for the real economy. Gold protects consumers, the most important component in any economic system: if you don’t have a market made up of consumers with a certain level of wealth, how can you sell? To whom? Consumer protection must come first, and gold is one of the main ways of protecting them,” states the CEO of Seasif.

Sustainability has also been at the forefront in discussions about the post-Covid world, as countries look towards establishing a more resilient global economy, one able to better withstand such events in the future –– and “green gold” may well be a part of that future. Green gold, in a sense, can be considered the “gold of the future” due to its ethical and sustainable extraction process. Seasif produces green gold, with a department entirely dedicated to green, and has allocated economic incentives to its continued production.

Even as 2020 draws to a close, the future may still look uncertain. But for those searching for greater security, gold may be one of the few certainties left.