Signs of recovery continue to appear here and there in Iceland as the country continues to pull itself out of the economic crisis. Good news in the form of unemployment figures broke today, which stood at 7.6% total employment for June, which translates to an actual figure of 12,988 people. In May, unemployment was at 8.3%, which means that there were 886 fewer unemployed people going into June.

Unemployment amongst men is decreasing faster than amongst women, with men making up 776 of the figure of 886, meaning that only 111 fewer women were unemployed. In terms of percentages, unemployment stands at 7.7% for men and 7.3% for women, according to the Directorate of Labour.

The decrease in numbers on the unemployment list is proportionally more in rural areas than in the city, with 8.5% unemployment in the city compared to just 5.3% in the countryside. The highest unemployment rate is in Suðurnes, the peninsula in southwest Iceland, which is currently 11.9%. The northwest region sees June’s lowest unemployment rate, where the figure is 2.6%.

The Directorate of Labour says that unemployment figures usually improve in July over June, due to seasonal fluctuations. In July 2009, unemployment stood at 8%, whereas in June of the same year the figure was 8.1%. The Directorate expects the figure to drop further in July, estimating a rate somewhere in the range of 7.2–7.6%.

Source: mbl.is
Image: Jenny Downing

Labels: Kreppa, Unemployment

The University of Oxford, along with five British local authorities, is filing a lawsuit against the now defunct estates of Glitnir Bank and Bayerische Landesbank. A source for news website Vísir claims that up to fifty court summons against the bank could be on the way. The claims come to approximately 50 billion krónur (£205 million, €250 million, $306 million).

The lawsuit is being filed to try and reclaim the deposits that the respective parties had in accounts with Glitnir in the UK. The suit which has just been filed is considered to be a test case; if the suing party wins, then Glitnir can expect around fifty more similar cases, expect to come to 50 billion krónur (£171 million, €208 million, $255 million).

In addition to the University of Oxford, there are other universities who are demanding their money back from Glitnir. However, most claims are coming from local authorities. One local authority which has come off worse than others is Kent County Council, which also lost approximately £50 billion (€60 billion, $74 billion) in Icesave, a former subsidiary of Landsbanki.

Source: visir.is
Image: net_effekt

Labels: Glitnir, Kreppa, Landsbanki, UK

Strong words came from a former director of one of The Netherlands’ largest banks which foresaw the Icelandic financial crisis, as he claimed that Iceland will be unable to pay back the controversially-named “Icesave debt” to the Dutch government. This was announced on the RÚV evening news.

Bert Heemskert, former CEO of Dutch bank Rabobanka, stated his opinion on TV station RTL when asked whether The Netherlands would get back the money it lent to Iceland for Icesave. He said that the amount is far too large for a small economy like Iceland to pay, also stating that it would be very difficult for Icelanders to completely pay off all of their debts in a reasonable amount of time.

Labels: icesave, Kreppa

On 31 May, the Central Bank of Iceland (officially Seðlabankinn) announced a transaction that bolstered its foreign currency reserves by a whopping 17%. The 26 public pension funds of Iceland were invited to a closed auction of Housing Finance Fund (HFF or Íbúðalánasjóðurinn) bonds, where they were sold for a total of €549m. The pension funds will sell off foreign assets to finance the foreign-denominated transaction.

Labels: Banking, Economy, Kreppa

The price of vegetables, both domestically grown and imported, has increased by 64% over the past three years, according to an evaluation conducted by Statistics Iceland. According to data from the consumer price index, the price of alcohol and tobacco products has increased by 55% since May 2007. Petrol prices rose a staggering 76% over the same period.

Farm produce excluding vegetables has seen a comparatively low price hike of 27% over three years. Other domestic food and drink products increased in price by 46%, and imported by 75%. Imported fruit and veg has always been more expensive in Iceland in comparison with other European countries, and these price increases only widen the gap between Iceland and other nations on food prices.

Inflation over a twelve month period measured 7.5% in May 2010, but stood at just 4.7% in May 2007. This follows instability of the króna since the bank collapse in autumn 2008, which included currency restrictions which have yet to be lifted.

Source: mbl.is
Image: muffet

Labels: Economy, Food, Kreppa

The concisely-named Organisation for Economic Co-operation and Development, or OECD, says in a new report that all the Nordic countries are now in a period of economic recovery. The organisation states that Iceland has achieved impressive results in its efforts to tackle the consequences of the bank collapse in the autumn of 2008. According to its report, economic growth is set to start again in the later part of this year, and should clock in at about 2.3% next year. Conversely, the rate of recession this year is expected to be around 2.2%.

Labels: Economy, Kreppa

The Glitnir resolution committee is expecting that Jón Ásgeir Jóhannesson will release a list of all of his assets as soon as the weekend is over, in response to the summons that were delivered to him earlier this week.

Jón Ásgeir’s solicitors received summons from the winding-up committee on Thursday, but according to the law he has two days to produce a list of all of his assets. Because the deadline passed over the weekend, the winding-up committee decided to give Jón Ásgeir until Monday to draw up his list.

If he does not produce the list in time, or he gives false information, he could face a stint in prison of up to 3 years in the UK.

In the summons from the winding-up committee, Jón Ásgeir is accused of having effectively taken over control of the bank in April 2007 and of having, alongside others, used his dominance over the bank to issue enormous loans to other companies that he and his business associates presided over.

Source: mbl.is
Image: mbl.is

Labels: Kreppa

Sigurður Einarsson, former CEO of Kaupþing Bank, has hired a top British solicitor who specialises in defending white-collar workers, namely Ian Burton (pictured right). Sigurður appears to be in safe hands, Chambers UK claims “[Ian] knows everyone and has seen it all before, which is very comforting to clients,” and that he’s “the iconic and polished all rounder.” No lightweight then. Sigurður was called in for questioning this week, yet remains in London.

According to Burton, Sigurður cannot be arrested in the UK because his arrest warrant is invalid outside of Iceland. The warrant was issued by Interpol at the wish of the Special Investigative Committee, an Icelandic body set up to investigate the financial collapse. Sigurður remains on Interpol’s wanted list, and so can lay claim to be being one of the few Icelanders to ever appear on the blessed list.

Sigurður has said that he will return to Iceland on the condition that he is not immediately arrested upon arrival. However, if evidence of any crime is found, then the Icelandic authorities can appeal to the UK for him to be extradited. With Burton on his side though, this may be more unlikely than likely. A quick search on the Internet reveals that Burton and his legal firm has been involved in defending many serious fraud cases in recent years, with such diverse clients as UK Members of Parliament and singer Amy Winehouse. We’ll keep you posted as this case develops, should be an interesting ride!

Sources: mbl.is, telegraph.co.uk
Image: BCL BurtonCopeland

Labels: Crime, Kreppa

According to British newspaper The Guardian, a lawsuit to the tune of $2bn (£1.3bn, €1.6bn) was launched against Baugur boss Jón Ásgeir Jóhannesson and his executives yesterday for their apparent plans to “siphon cash out of [Glitnir]”. In addition to this, the Glitnir winding-up committee are suing PriceWaterhouseCoopers, the bank’s auditors, for negligence.

At the request of a British judge, Jón Ásgeir’s assets have been frozen the world over. The court served papers to Jón Ásgeir in his Manhattan apartment last night. His partner, Ingibjörg Pálmadóttir, is not off the hook either. She faces court after failing to repay a $30m (£20.3m, €23.6m) loan to open a luxury boutique hotel in Reykjavík.

The lawsuits are a culmination of an investigation into the causes of the bank’s collapse by forensic accountants Kroll.

Sources: mbl.is, guardian.co.uk
Image: Wikipedia

Labels: Baugur, Kreppa

Team members from the epically-named Norwegian Economic Crime Unit will come to Iceland in June to assist their colleagues with the investigation into affairs surrounding the Icelandic banking system. Geir Kjetil Finneide, the unit’s senior officer, is remaining mum on exactly how many of his specialist team will be sent to Iceland to join the investigation.

Finneide said in an interview with the Norsk Telegrambyrå that is it not at all unusual for members of his team to travel to other countries to offer their assistance to their international colleagues. What would be special in this case, however, is the size of the investigation, and the sheer fact that such a large portion of the banking system is involved.

Labels: Kreppa, Norway

A nice piece of positive news broke today. The rate of registered unemployment in Iceland dropped to 9% in April, marking a 2.6% decrease on the previous month. In real terms, this translates to about 14,669 unemployed citizens, a decrease of 390. Who said this country was in the middle of a kreppa?

Men saw the greatest drop in unemployment rates, with around 374 fewer unemployed, whereas for women the figure for April stands at only 16. The drop is proportionally larger in rural areas than in Greater Reykjavík, where unemployment dropped by about 2% (184 people), in contrast with a rural decrease of about 4% (206 people).

The construction industry saw a real-term decrease of 217. It is evident that unemployment is still more prevalent in the capital area, where the figure stands at 9.7% compared to 7.8% in the countryside, a difference of 1.9%. The region with the highest unemployment rate (14.6%) is Suðurnes, a peninsula close to Reykjavík (mostly lava fields), whilst the least affected region is the Westfjords (3.7%).

For those of you lucky enough to understand Icelandic, more information on unemployment rates can be found in the original article. Hopefully these figures point to the first signs of a recovery, but we wouldn’t want to speak to soon.

Labels: Kreppa, Unemployment

Sigurður Einarsson, the former director of Kaupþing Bank, will not return to Iceland voluntarily for questioning by the Special Prosecutor. He is now part of a rather exclusive club of Icelanders who appear on Interpol's wanted list.

Sigurður said in a phone interview with Fréttablaðið today that he was surprised by these events. He said that it surprised him that people were arrested immediately upon arrival in Iceland, and that these arrests and custody rulings were, to his knowledge, completely unfounded. One wonders if, living in Britain, he has simply failed to get his hands on a copy of Iceland's "Black Report" which details, among other things, exactly what these arrests are based on.

He also told Fréttablaðið that he does not intend to take part in a play that, to him, seems made to mollify the Icelandic nation. He says he is going to rely on the human rights of Britain, where he currently resides.

Source: http://www.ruv.is/frett/kemur-ekki-otilneyddur-0

Labels: Banking, Crime, Kreppa