Iceland: Unemployment at 2%. Without EU. The real situation beyond the lies of the Europhiles.

Author: Maurizio Blondet.
Rightly proud of it, the Reykiavik government gave the news: iceland went back more or less at the unemployment level of 2007, before the great crisis of its banks. The unemployed are 1,9% of the active population. Ok, Iceland’s got only 320.000 inhabitants, but the crisis it was subjected to was proportionally catastrophic, as the Monetary Fund admitted: the three major banks failed all in the round of few days, they had “actives” (that is: they were exposed to)  for 10 times the national GDP; mainly with foreign creditors, mainly british and dutch; and simultaneously to the subprime crisis that dragged to the bottom the banks of Europe and America. The economy fell down, unemployment raised to 10 per cent (with peaks of 12). How could the icelanders manage it?
Simple. “We wouldn’t be able to exit the disaster if we had been members of the European Union”,  Prime Minister Sigmundur DaviĆ° Gunnarson explained. The additional luck is not to have entered in the eurozone, but to have their own sovereign currency (the way I want Italy to have Ed. notes). “If the debts had been in euros, if we had been obliged (by the EU) to do like Ireland or Greece, and take charge of the failed banks, this would have made our economy sink”.
Sustained by the population (that had kicked away the guilty politicians), the new government did the opposite of what the ECB and Brussels recommend. Instead of saving the banks at taxpayers’s expenses (bail-out) it started with sending to jail the responsible bankers; it let the banks fail, limiting this action by preserving the deposits of the residents, that means the savers and the icelandic families; the foreign depositors have nothing, in the end they knew they were participating to hazard gambling. They lost everything with the failure of the three banks.
Then, the restoration plan. A plan to which the population (obviously with a high level of education) participated consciously, taking with awareness the unpleasant parts: a couple of years of tight belt   (austerity of balance) and tax raising, acceptable sacrifices if this would bring to the recovery. But also here, here’s some measures that Europe forbids: 1) control of the capitals (horror horror!), 2)procrastination of the adjustment of the balance (that is “breaking your deficit”) and 3) and currency devaluation. A strong devaluation – 60% – that triggered a non indifferent flame of inflation; mastered at present for the consequent economic recovery. Reykiavik repaid all the loan of the IMF (more than 2 billions dollars), and didn’t sacrifice the welfare state. The national debt is today 100% of the GDP, but it doesn’t provoke any restlessness on the markets. So much that Iceland came back on the said markets with an emission of 2 billions, which was entirely absorbed.
Firms stopped failing, others were born, and the young icelanders didn’t have to emigrate like the young portuguese, the young spaniards, greek or italian.
By march 2015 it retired the candidacy for entering the EU, ” estimating that its interests are best defended staying outside of it”.
So, to exit the recession is possible. By not staying in the eurozone and by not submitting yourselves to the european “regulations” and Berlin’s diktats. They’ll tell us: the experiment was successful because the country is microscopic. The objection may have a part of truth, in this sense: for the fact that it is little, the masters of the financial system neglected the country. They wouldn’t allow Greece or even more Italy to do the same, they would put in action punitive and vindictive measures (with Athens they did it) because heterodox measures “mustn’t” bring to success, “cannot” become a model that others would be tempted to imitate. -*See my notes Ed. -
It is demonstrated by the little statement with which with grinding teeth the IMF congratulates itself for the icelandic success: “The eclectic ensemble of orthodox measures worked in Iceland’s case, it’s everything but certain that it can be transferred elsewhere, like in the eurozone in crisis”. Certainly not.

Gesell for billionaires

In fact, while the world financial system collapses and the terminal capitalism has triggered what maybe is “the greatest crisis in history”, (italian) minister Padoan announces the cure: the government will do new privatizations, Post, Eni (it’s in the perfect othodoxy), and the central banks experiment the negative rate. To oblige the depositors to “invest”, officially. In reality to take away the savings from the families, considering that they cannot extract more taxes from the taxpayers squeezed by the economic depression and from the unemployed, and to throw them in the big pot (they’ll call it “restoration of the banking system”).
This is demonstrated by a strange public notice of the J.P. Morgan, which reports that in Davos, an unnamed central banker said: “let’s hurry up to eliminate cash, so the monetary authorities will be free to impose negative rates much below the 1%”. In short if you’ve got € 100.000,00 in a bank, in one year they take let’s say 3, let’s say 4 thousand. And you won’t be able to help it, because you won’t be able to withdraw the bank account in cash.
This of the negative rates is a “non orthodox” measure – when they like, these lords allow themselves to do it. It’s not an idea of theirs. It’s the famous “currency perishable” that Silvius Gesell (died in 1930) proposed (spat and laughed at) as a cure for the extreme deflation – like the one their lordships established at present with their policies. In deflation, people make treasure of the money, procrastinate the purchases hoping in a further fall of the prices; this makes the deflation worse and it turns it in itself. Gesell proposed the emission of banknotes with a monthly mark glued on them to keep them on course of validity, the cost of the mark made the banknote slowly “perish”, like a controlled inflation, that obliged the savers to spend and invest instead of keeping the money under the mattress.
So, are the central banks imitating Gesell? Not exactly. Or better not at all. Gesell had in mind to help the unemployed, bringing back in circulation the frozen money; the negative rates of the bankers are not done to give jobs to the unemployed, but to expropriate the last liquidity left in private hands, and impeding in every way that the people  avoid the clipping, maybe withdrawing the money in cash and putting them under a brick where they “make more” than in bank: zero per cent). The almost certain effect will be to worsen the deflation, instead of winning it.
It’s singular that the central banks, now that are completely in the hands of private speculation, take back in favour of themselves, measures that the speculative finances had fought. After having fought the agreement between the Treasury and the national central Bank, for which this one obliged itself to buy the quotas of public debt titles that the “market” didn’t absorb; after having abandoned completely to the “market” the fixing of the rates for the State’s debts (that before this never failed), now – in the terminal phase – here’s that central banks resort to the same trick, buying State bonds for which the “market” would require prohibitive interest rates. But there a difference and it is big: earlier, the price control effect produced by the “marriage” between central bank and Treasury had as aim to allow the State to make infrastructural public investments making debts at a very modest rate; now, the aim of the “financial repression” is to allow another round in the carousel of the Stock Exchange. If the money doesn’t make anything, or even gives interests of minus 2 or minus 4, one needs to speculate in the Stock exchange to obtain a profit. With the risk of losing everything.
Translation by Paola Distilo
Original italian article 

*Paola's notes:
I like to translate Blondet, but personally I do not share this impossibility point of view: we can exit the EU the same and do even better than Icelanders, we are bigger and stronger, I don't mean better than they morally.