Iceland's President hit back this week at critics in the UK who have tried to use the Icelandic banking crisis to attack arguments for an independent Scotland.

Speaking to BBC Scotland President Olafur Ragnar Grimsson said that the UK "...was being a bully against a small country" and that Iceland had been treated unfairly. He went on to say that for critics looking to politically capitalise on the financial crisis affecting small nations like Iceland, Norway and Ireland should:

"...first of all look at the difficulties in London, and in England and in the United Kingdom as a whole as well as a number of other countries on the continent and the United States."

President Ragnar Grimsson suggested that the "smallness", "inherent strength" and the "independence of political institutions" meant that in nations like Iceland, economic recovery would be relatively quicker than in the UK, "Germany, France, the United States or others".

Over the last few months the UK politicians and media has taken pleasure in using Iceland's situation to argue that small independent countries cannot cope with down turns in the world economy. In Ireland however, politicians are using Iceland's banking crisis to try to argue the case for people to support the Lisbon Treaty. Last week Taoiseach Brian Cowen suggested that people should vote for the Lisbon Treaty in a second referendum in 2009, because Ireland should not only be grateful for the EU, but that Ireland's membership of the union somehow depended on a yes vote, saying:

"Without being members of that (European) union I would hate to think where we would be. We have seen unfortunately where Iceland were when they had to stand alone."

The banking crisis in Iceland has affected the other Celtic countries, in particular the Isle of Man. Not long before the Icelandic banking crisis, Kaupthing Singer & Friedlander bank on Isle of Man transferred £636 million to, Kaupthing, its sister bank in the UK. Kaupthing (UK) then had its assets frozen by the UK Government shortly after, along with the Isle of Man's largest ever single investment.

In Wales, nine Welsh Councils lost £65 million, eight Scottish councils lost £46 million and Cornwall County Council lost £5 million in investments in Iceland based banks. One of Ireland's major mortgage providers alone, Irish Life & Permanent PLC, wrote off 92 million euros in losses in November 2008 from investments in three Icelandic banks.

The Government of Iceland has blamed the UK Government for some of the problems that have occurred and said that it should be entitled to compensation. The UK Prime Minister Gordon Brown invoked the Anti-terrorism, Crime and Security Act of 2001 against Iceland on account of the Icelandic banking crisis, arguing that it was affecting UK based investments.

The terrorist legislation froze the assets of many of Icelandic banks in the UK and effectively severely damaged economic and public relations between the two states. Consequently, Iceland has considered taking the UK Government to the European Court of Human Rights over its action, which critics say effectively made the Icelandic people potential terrorists (see (voir le site)

(Article prepared for Celtic News by Rhisiart Tal-e-bot)

J B Moffatt Director of Information Celtic League 22/01/09

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