euro|topics - Russian billions for Iceland?

04/07/2009

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Main focus of Wednesday, October 8, 2008

Russian billions for Iceland?

In the current financial crisis, Iceland is the first state to end up on the verge of bankruptcy. A four billion euro loan from Russia could help Reykjavik out of its financial squeeze. Although Moscow has yet to give its approval, Europe's press sounds the alarm for Iceland's independence.

Svenska Dagbladet - Sweden

The Stockholm-based daily Svenska Dagbladet asks who stands to gain from Russia giving Iceland a loan: "What happens if Iceland gets its huge loan from Russia and then can't pay it back? Will the Kremlin take over this strategic island? Iceland is a Nato member but it lacks its own armed forces and the last American soldier left Keflavik two years ago. This would be an interesting case for international bankruptcy law. States and rulers have often defaulted on payments, but it was mostly others who suffered the economic consequences ... As an open Western economy Iceland cannot run away from its debts. However, now it's not Iceland as a state but its expansionary banks that have borrowed money. If the banks had gone bankrupt the assets would have been divided up among the debtors." (08/10/2008)

Süddeutsche Zeitung - Germany

A loan to Iceland running into the billions would be good for Russia's political image, writes the Süddeutsche Zeitung. "The request from Reykjavík puts the Kremlin in an agreeable situation. After months of European and American accusations for having abased and dismembered Georgia, Russia of all countries is now to come to the rescue of the small Icelandic democracy. And other countries are lining up to do the same. No Kremlin screenplay could have done a more dramatic job, and it fits in wonderfully with the image Dmitry Medvedev was trying to project in calling for 'joint action' vis-à-vis the global crisis when he delivered the first Internet message by a Russian president in front of a high tech landscape of screens and telephones. Russia would be only too happy to help. Sceptics suspect Moscow wants to earn political interest on its loan by gaining economic influence or support in controversial questions like its Georgia policy. That would bring Moscow out of the defensive and allow it to buy its way back into diplomatic favour, so to speak." (08/10/2008)

The Times - United Kingdom

The Times expresses concern over Iceland's economic and political independence in the event that Russia steps in to bail it out: "Iceland's crisis is not only a morality tale of global concern, given the number of foreign, especially British, investors; it also lays the country open to predators ready to seize this prize. Russia has offered to bail out Iceland to the tune of four billion euros. ... Moscow has the money, means and motivation. And however nervous this staunch Nato ally may feel, Iceland's politicians have little option but to talk. For the Kremlin there could be no greater relish than extending its influence into the North Atlantic. If we are not careful, Iceland will signal the ominous start of a new round of mergers and acquisitions – not of companies, but of whole countries." (08/10/2008)

» To the complete press review of Wednesday, October 8, 2008

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