Connect with us

Europe

Lessons World Must Learn from Iceland Tackling its Financial Crisis

Published

on

Iceland Bank Protests
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
  1. Resignation of the government, imprisoning the responsible parties
  2. Nationalization of the banks.
  3. Referendum rejecting the repayment plan.
  4. 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

Please share and join the discussion on facebook by clicking the “Like” below.
Visit The World Reporter for discussion on this post. Or you may like to know what others are saying on this topic.
Use your ← → (arrow) keys to browse

Sanskar Shrivastava is the founder of international students' journal, The World Reporter. Passionate about dynamic occurrence in geopolitics, Sanskar has been studying and analyzing geopolitcal events from early life. At present, Sanskar is a student at the Russian Centre of Science and Culture and will be moving to Duke University.

Continue Reading
Comments

Europe

National Police arrests 60 people for money laundering in Majorca

Published

on

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.

Prev postNext post
Use your ← → (arrow) keys to browse

Continue Reading

Economy

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

Published

on

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.

Use your ← → (arrow) keys to browse

Continue Reading

Europe

How much money do you need to live comfortably in Spain?

Published

on

malaga andalusia spain

There are plenty of reasons why you may be thinking about living in Spain: its population is friendly and kind; its climate, especially in the coastal areas, is enviable; its gastronomy is incredible… but, what about its prices? What is the most affordable way to live in Spain?

Perhaps the most important question if you decided to go: would it be better to buy instead of renting a property in Spain. Or yet living in a Spanish residence?

Spanish cities where to live cheap and well

In the geographical variety that Spain presents, we can find many differences in average salaries and the standard of living that reside there would require. The areas of Galicia, Extremadura, Castilla y León, together with Almería and the south of Alicante usually have a lower price of euros/square meter in their homes. The quality of life is really appreciable, but you should know that there are fewer possibilities for business and transports.

The autonomous community of the Basque Country, Catalonia, and Madrid, which have higher than average incomes (normally more than 24,000 euros per year), also have higher prices. However, Madrid has such a wide range of rents that it sometimes makes them cheaper than other countries. 

In addition, and taking into account the tourist seasons, the areas of Valencia and Andalusia are normally a preference when it comes to living in Spain for a while or even spending your retirement. Although day-to-day life can be more expensive than in other areas of Spain, the mild climate and variety of leisure options are often worth it in the long run. 

Whatever your option is when moving to another country, especially if you don’t know its legal system, can be very tiresome. That’s why our advice is to try to contact local agencies (that speak English) to give you fair and fruitful advice. For example, to move to Andalusia, we usually recommend Tejada solicitors

I have already decided on the place. Now what?

Well, if you have already fully immersed yourself in the streets of a beautiful city that we have talked about, what should be your first step?

Decide what kind of stay you want to be in (since your future economic situation will also depend on this: taxes, permits…). You may have already chosen, for example, property conveyancing in Marbella, but it is recommended that you also think about renting a property, because it can be very profitable while you are in your other place of residence.

To sum up, before moving to a Spanish city, decide if you want to spend a little more money per month in exchange for the exceptional conditions that their precious land can give you; secondly, contact a reliable agency that will help you make the best investment and even more, apply for a Spanish residency if you are decided to stay for a long time.

And remember: a move is always a new beginning.

Use your ← → (arrow) keys to browse

Continue Reading

Trending