Cold Cash: Europe's Complications over the Iceland Bank Crash

Aysegül Er writes for EA:

After the bankruptcy of Lehman Brothers on September 2008, there were other bank collapses. One of these was of an Iceland bank, Icesave, which held substantial accounts from overseas clients, including in Britain and the Netherlands.

The British and Dutch Governments eventually agreed with Icelandic officials that Reykjavik would repay money to depositors. In December 2009, Iceland's Parliament approved Bill to reimburse more than 3.8 billion Euros. However Iceland’s President Olafur Ragnar Grimsson refused to sign the Bill. On Sunday, a public referendum was held to decide whether Iceland should repay.

The voters --- by a margin of 93 to 2 percent --- said No.



The Icelandic Government declared “There is widespread frustration over the claim on ordinary citizens in Iceland to pay the price for the irresponsible behavior of reckless bankers.” It added, somewhat wishfully, that it had “clearly stated its intention to honor its international obligations and remains fully committed to implementing the bilateral loan agreements with the UK and the Netherlands".

Foreign Minister Össur Skarphedinsson took a tougher line alongisde the referendum, arguing that the two creditors should heed the cry of defiance delivered by Icelanders and agree to soften the terms of repayment. He added reason for manoeuvre, saying that the December legislation being voted had already been superseded by a recent offer from Britain and Netherlands to lower the 5.5 per cent interest rate.

Beyond the conflict is Iceland’s application to join the European Union. This month, the European Commission recommended proceeding with accession talks, but support is needed from all 27 member states for Iceland's membership. Dare Britain and Netherlands withhold their Yeses in response to the No of the Iceland voters?

Latest Iran Video: Hillary Clinton's Message to Iranian Women (8 March)

Another move in Washington's public diplomacy campaign: last March, it was President Obama's Nowruz (New Year) message to the people of the "Islamic Republic of Iran"; this March, it is Secretary of State Hillary Clinton's message to Iranian women on International Women's Day:

[youtube]http://www.youtube.com/watch?v=TAvn_0NkeMg&feature=youtu.be[/youtube]

The Latest from Iran (8 March): Foreign Affairs

The Latest from Iran (8 March): Foreign Affairs

2000 GMT: More on Women's Day. An interesting interview with Parvin Ardalan, winner of the Olof Palme Prize in 2005 it was “for making the equal rights of men and women central to the struggle for democracy in Iran”:

Many of the women’s groups decided after the election not to communicate with the government because it has lost its legitimacy. For example, they collected all these signatures for the One Million Signatures campaign to give to the parliament, but now people no longer want to sign anything because they believe that no demands should be sent to a government that has no legitimacy. The situation has changed – people want gender equality but they don’t think the approach is to go to this government to get it. So currently even the groups that did have contact with the government, no longer do

1900 GMT: Rafsanjani Watch. Former President Hashemi Rafsanjani has met with reformist students of Tehran University for the second time in recent months.

1850 GMT: We've posted the video message of US Secretary of State Hillary Clinton to Iranian women on International Women's Day.

1845 GMT: Political Prisoner News. An Iranian activist reports that Committee of Human Rights Reporters member Mehrad Rahimi was released on bail this evening. Five other CHRR members are still imprisoned.

NEW Latest Iran Video: Hillary Clinton’s Message to Iranian Women (8 March)
NEW Iran: A Journalist Writes Her Detained Husband and “Mr Interrogator”
Video: General Petraeus on Iran and Iraq (7 March)
Iran: Senior Reformist Amani “We Have Not Decided to Remain Silent”
The Latest from Iran (7 March): The Elections Next Door

1800 GMT: How Does Iran Celebrate International Women's Day? Building on the news that poet Simin Behbahani was barred from leaving Iran for ceremonies in Paris (see 0835 GMT), Golnaz Esfandiari notes other cases of restrictions of women's rights in the country.


1755 GMT: War on Terror News. Speaker of Parliament Ali Larijani has announced that Iran has asked Germany to extradite the leader of the Party of Free Life of Kurdistan (PJAK) to stand trial.

1745 GMT: Denial of Day:Tehran Province Governor Morteza Tamaddon claimed today that security and police forces did not enter the campus of Tehran University on the night of 14/15 June.

Responding to an 18-minute video, widely circulated last month, that showed men attacking university dormiitories, Tamaddon warned, “If anyone claims [security and police were present], we are ready to follow up on the matter.” He insisted a small group of students had started a protest in the University residences and were dealt with by the “appropriate authorities.”

1735 GMT: All is Well Press Release of Day. I have to preface this, while trying to keep a straight face, with the note that throughout Sunday, Iranian state media were announcing loudly that President Ahmadinejad would be in Kabul today (see 1055 GMT):

An Iranian diplomat in Kabul said Monday President Mahmoud Ahmadinejad would head a high-ranking delegation to Afghanistan on Wednesday, rejecting reports of delays in his visit.

Afghan sources in the presidential office had earlier claimed that Ahmadinejad had postponed his visit, which, they said, had been originally scheduled for Monday.

The Iranian source, however, told Press TV that Tehran had announced that the visit would take place during the week, without specifying that a day had been picked by the president.

The diplomat also rejected reports that the visit's itinerary had been influenced by US Secretary of Defense Robert Gates' visit to Kabul.

1730 GMT: Communicating with Iran. The US Treasury Department has approved an exemption to American sanctions on Iran, Sudan, and Cuba to allow the export of Internet communications software. Deputy U.S. Treasury Secretary Neal Wolin said that the change is intended to help people "exercise their most basic rights."

1715 GMT: Economy Watch. Looks like the Ahmadinejad Government may have scored a big victory, with the approval of a $347 billion budget for the Iranian year to March 2011.

This is less than the Government's $368.4 billion request. It also appears that the $40 billion sought from subsidy cuts has been reduced to $20 billion. Still, given the criticism of the Government over the proposal, the passage is a significant advance.

The vote for the budget was 151-62 with 12 abstentions.

1420 GMT: An Unwelcome Coincidence. Within 30 seconds of posting the update below, I read the news from the Kalemeh website:

An Iranian appeals court handed a five-year jail term to a reformist journalist...while...authorities freed five other critics on hefty sureties.

The journalist, Bahman Ahmadi Amoui, a prominent critic of President Mahmoud Ahmadinejad's economic policies, was previously sentenced to seven years in jail and 74 lashes, after a government crackdown on opposition supporters.

But the appeals court reduced that sentence to five years in jail and waived the lashes.

1415 GMT: A Special Letter. A bit limited with updates today because of academic duties; please keep sending in your latest news.

Meanwhile, we've posted a letter from journalist Zhila Baniyaghoub to her husband, Bahman Ahmadi Amoui. Both were detained after the June election, but Baniyaghoub was released while Amoui remains in Evin Prison. The letter, posted on Sunday, is one of the most moving expressions of feeling and thought I have read in this crisis.

1100 GMT: Adding Insult to Injury. Here's US Secretary of State Robert Gates, on his way to meet Afghanistan President Hamid Karzai after Karzai told President Ahmadinejad to stay in Iran: "[Tehran] also understand that our reaction, should they get too aggressive in this, is not one they would want to think about."

1055 GMT: Rejected. OK, now the news from Kabul makes sense....

I noticed a few hours ago that US Secretary of State Defense Robert Gates is also in Afghanistan today, paying a visit to President Hamid Karzai. This conjured up wild visions of US and Iranian delegations huddling somewhere in Kabul while Karzai manoeuvred between meetings with Gates and President Ahmadinejad.

But, of course, the simpler outcome is that the Afghan leadership --- whether because of pressure from the Amerians or of their own accord --- would choose their Washington visitors and tell Ahmadinejad to stay home. From Press TV:

President Mahmoud Ahmadinejad has postponed a trip to Afghanistan devoted to providing "solutions for settling the problems" in Iran's eastern neighbor.

The one-day visit, originally scheduled for Monday, would be the President's first visit to Afghanistan since both he and his Afghan counterpart Hamid Karzai were re-elected last year.

"President Ahmadinejad won't be coming to Kabul," an informed source at the Karzai's office told Press TV on condition of anonymity.

US Defense Secretary Robert Gates, the source added, has, however, arrived in Afghanistan on Monday morning on an unannounced visit.

The source did not pinpoint a next date for the meeting between the two presidents.

1030 GMT: Breaking News. It is being reported that President Ahmadinejad has cancelled his trip to Afghanistan, giving no reason.

0905 GMT: In Their Honour. For International Women's Day, Setareh Sabety has posted an essay, "Working Class and Female in Iran": "For whatever it is worth, I thought that I should expose the lives of three very ordinary Iranian women from different backgrounds and different sensibilities. This is for them."

0835 GMT: Stifling the Artists. Iranian authorities have barred one of Iran's most famous poets, Simin Behbahani, from leaving the country. Behbahani had been invited to read her work at International Women's Day ceremonies in Paris.

0730 GMT: Political Prisoner Watch. The authorities continue to release the relatives of prominent blogger Agh Bahman: his sisters Banafsheh and Jamileh Darolshafaei. His cousin Yashar Darolshafaei has had bail set at $70,000. However, Abolhasan Darolshafaei, Bahman's father, is still detained.

0715 GMT: The Israel Front. Meanwhile, the US continues to send the Very, Very Concerned message to western Jerusalem, not to encourage an Israeli attack on Iran but to dissuade the Israelis.

The latest high-profile signal comes from Vice President Joe Biden's visit today. Before meeting Israeli officials, he declared:

Though I cannot answer the hypothetical questions you raised about Iran, I can promise the Israeli people that we will confront, as allies, any security challenge it will face. A nuclear-armed Iran would constitute a threat not only to Israel -- it would also constitute a threat to the United States.

0705 GMT: China and Iran. The International Crisis Group offers an incisive analysis on China's position on the Iranian nuclear issue:

Beijing is unconvinced that Iran has the ability to develop nuclear weapons in the short term and does not share the West’s sense of urgency about the possibility of a nuclear-armed Iran, despite the risks that this would present to China’s long-term interests. Moreover, it does not believe the sanctions proposed by the West will bring about a solution to the issue, particularly given the failure of this approach so far. And while Beijing has stated that it supports a “nuclear-free” Middle East, it does not want to sacrifice its own energy interests in Iran. However, if China finds itself facing unanimous support for sanctions from other Security Council members, it will delay but not block a resolution, while seeking to weaken its punitive terms.

0635 GMT: Look for Iranian state media to spend Monday playing up Mahmoud Ahmadinejad's trip to Kabul to chat with Afghanistan President Hamid Karzai. After several months of being ostracised by the international community, Ahmadinejad has become one of the big boys again. This visit, following the Iranian President's diiscussions in Damascus, points to the Iranian Government's play for recognition and influence in both the Middle East and Central Asia.

But is Ahmadinejad a central figure or just a figurehead? We're still watching the Japan front on the uranium enrichment story, with yet another sign from Tehran yesterday that a deal may soon be on the table for Tokyo to carry out third-party enrichment.

And, while posting the video, we're trying to read General David Petraeus's appearance on the stage yesterday. His reference to Iran's regime as a "thugocracy" seems a crude attempt, both in rhetoric and conception, to match Hillary Clinton's recent pronouncement of an Iranian "military dictatorship".

However, the most significant part of Petraeus' statement may be his assurance that Tehran is too preoccupied with internal matters to mess around abroad, including in Iraq. That reads as a declaration of the containment of Iran, which indicates that Petraeus will not be pushing for more confrontational measures against Tehran, including military action.

Iran: A Journalist Writes Her Detained Husband and "Mr Interrogator"

Zhila Baniyaghoub and her husband Bahman Ahmadi Amoui, both well-known journalists, were arrested by the Iranian security officials after last June's Presidential election. Baniyaghoub was released some months ago, but her husband is in Evin Prison. On Sunday, her open letter was published on the RAHANA website:

Bahman! Why did the interrogator release me, but not you?

I had always thought that I know you very well until only very recently when I realized that I had never really known you this well before! Looking at your calm, serene and tranquil face, I can now see and admire your true persistence, patience and perseverance. Every time our eyes meet from behind the glass in the visitation room at Evin Prison, I get so calmed, reassured and relieved just by the way you look at me: so deep, powerful and soothing . It’s as if you can see right through me, you can fight away all my worries; and all of a sudden all the pain I’ve been feeling due to your absence disappears.


The last time we met, I asked you: “My dear Bahman! Aren’t you tired of the prison?” “No, Why get tired?”, you replied.

You said it so strongly, with your voice full of honesty, that I believed you and did not ask anything more.

I remember once my interrogator, who was also your interrogator, told us: “You’ll go, but only when you learn your lesson!”

I had forgotten this sentence until our dear friend Shiva Nazar Ahari was released from prison.

She is released while some of our friends are still in detention. When I congratulated her freedom she replied:
“Zhila! I was going through interrogations in jail again and again those days. Now, I keep asking myself if I had made a mistake that I was released. What have I done that I’m released before others?”

And at that time, the words of the interrogator echo through my ears again: “You and Bahman will go, but when you learn your lessons!"

My dear Bahman! This sentence is echoing constantly, making me exhausted. As Shiva said, "What have I done that the interrogator released me sooner than you?" I am envious of you these days. Of you who were even more resistant than me; of you who have probably made fewer mistakes during the interrogations; of you whose interrogator cannot think of any repentance or exhaustion on your part for being kept in jail. In fact, that’s why he doesn’t let you out.

I have mixed feelings. Positive and negative: positive because today, after ten years of our marriage, I know you much better and I am proud of you more than ever. I am proud of you because every time that I see you, you never ask about your case. You never ask when you will be free. Whenever I want to explain how I am chasing your case in the court, you change the subject immediately.

And when you see me insisting, you say, “I’ll stay here as long as it takes; no problem, no exhaustion.” And it makes me laugh: ”Honey! It seems you haven’t learned your lessons when you say such things! They might be listening! Please say you are tired of this! Say you’ve learned your lessons and you are repentant now!" And you laugh, you just laugh.

And I have a bad feeling. What have I done that they released me while you are still in prison? Why did the interrogator think that I have regretted my past?

You said “My confinement might make a better future for my little Amir and all children as opposed to my release,” and at this moment I recalled that I have heard something like that from a detained woman, I mean Shabnam who is still in prison and as her released friends say, “she [Shabnam] never prays to God for her freedom, instead she says ‘Dear God! If my confinement helps my country to thrive, let me stay in prison and if my freedom does so, then set me free.’ ”

Every time you say, “Living in prison is full of different experiences”, and then you talk about your experiences, I understand that you are still a journalist, even there.

The mere two months of imprisonment were full of pure moments. You say you could never experience that solitude in solitary confinement anywhere else in the world. You say you have recalled all of your life moments again and again in the darkness of the cell, making you feel like a light feather.

You said that after the recalling all memories of the life you have realized that from now on you must be kinder and more patient and tolerant towards others and that the most important decision of yours after release, is to go to those who once might have been bothered by you even slightly. That you are going to like your adversaries more than before. Such words are said by you; the person who is well-known among friends, colleagues and family members for his admirable tolerance.

My dear Bahman, now I can thank the interrogator who gave me the chance to know you and be proud of you more than ever: Thank you, Mr. Interrogator!

The Day After the Iraq Election: "Politics Takes Over"

1220 GMT: The excellent analyst Marc Lynch has just made the immediate point, "All the Iraqi lists appear to be claiming victory. I'd wait for official results, which will be a while." His comment comes a few hours after a CNN correspondent pondered, "Each TV station corresponding to each political bloc saying that they are the winners...hmmm...."

The “Violent Semi-Peace”: Elections in Iraq, Escalation in Afghanistan
Iraq LiveBlog: Election Day

This is the real politics of Iraq, a day after the headlines of bombings and "democracy". With no party in the position to establish a national majority and indeed, outside Kurdistan, even a regional dominance, the negotiations, coercions, and manipulations take over, even before the preliminary results are announced on Thursday.

In Kurdistan, there is an intriguing contest between the Kurdistan List --- made up of the Kurdistan Democratic Party, led by Kurdish Prime Minister Masoud Barzani and the Patriotic Union of Kurdistan led by Iraq President Jalal Talabani --- and the Gorran Party, established to break the stranglehold of the KDP and PUK on Kurdish politics. An activist says that Gorran narrowly won in the city of Suleymaniyah and lost in province of the same name; however, Gorran is claiming fraud in the provincial vote. Another activist says that Gorran has also secured seats in Diyala, Mosul, and Salahaddin; however, the Kurdistan List has triumphed by a 2:1 margin in Erbil.


Juan Cole offers an overview:

Sunday's vote for a new parliament in Iraq on Sunday could result in two possible geopolitical futures for that country.

If the Iraqi National List of former interim prime minister Iyad Allawi did well enough to come to power, that would reorient Iraq radically, taking it back in some ways to 2002. Allawi's coalition is largely made up of Arab nationalists who would see Iran as a threat and would ally with Saudi Arabia, Jordan and Egypt. Baghdad would go back to helping contain Iran. Sunni Arab radicalism would likely be tamped down. For Washington, it would be the best of all possible worlds-- a pro-American Iraqi government headed by a former CIA asset that is willing to help pressure Iran for the West. Internally, an Allawi government that depends heavily on Sunni Arab constituencies would find it difficult to compromise with the Kurds on the disputed province of Kirkuk or on Kurdistan's interests in Ninevah and Diyala, setting the stage for a potential civil war.

If, on the other hand, Prime Minister Nuri al-Maliki manages to hold on to power, Iraq will remain firmly in Shiite hands, and will likely have warm relations with Tehran. Certainly, Baghdad would have no interest in helping contain Iran. Relations with Saudi Arabia will continue to be bad. As the US withdraws, Iranian influence could ramp up and fill the vacuum. Al-Maliki also has his tensions with the Kurds, but his relatively bad relations with the Sunni Arabs of Mosul mean that he could deal with the Kurds without incurring much more enmity from the Sunni Arabs than he already does.

So those are the two possibilities facing Iraq-- roughly, reintegration into the Sunni-dominated Arab League, or an Iran alliance. In a way, the choices replicate those of the 1930s, Iraq's first decade of independence from Britain. The government of PM Hikmat Sulaiman in 1936-1937 rejected Arab nationalism and developed good relations with Iran. Sulaiman was a Turkmen and he served under the military dictatorship of Bakr al-Sidqi, a Kurd. There is a sense in which the al-Maliki-Talibani condominium of the past 4 years revives many geopolitical themes of the Sulaiman-Sidqi period. Their dire enemies were the Arab nationalist officers, who were focused on Palestine and felt more kinship with Egypt than with Iran. Allawi is more in that Arab nationalist tradition, though he is by heritage a Shiite.

Here is why I think the return of Allawi as prime minister is unlikely despite an apparently strong showing for his party in the elections.

The Saudi-owned pan-Arab London daily "The Middle East" [al-Sharq al-Awsat] is reporting that its correspondents are conveying an (unscientific) impression from exit polling that the Iraqi National List of Allawi is doing extremely well in the Sunni Arab provinces, and is running a strong second in the Shiite south (Kurds in the north typically vote only for Kurdish parties.) The report is rather breathless and I think the numbers are almost certainly exaggerated. It also alleges that current prime minister Nuri al-Maliki's State of Law coalition is getting 40% of votes in the Shiite south, which may be true for Baghdad and Basra (it did nearly that well in the provincial elections last year), but it would represent a major change in voting patterns in rural Shiite provinces such as Maysan and Dhi Qar.

Even so, without an unexpected landslide in the south, Allawi is unlikely to become prime minister. He will need 163 seats out of 325 to govern, and there is probably no way for his coalition to deliver them. Even leading lists will likely get less that 100 seats, and so will need post-election coalition partners. That small parties willing to ally with Allawi would have as many as 75 seats to deliver to him seems unlikely. So he'd have to deal with the big three--the State of Law, the National Iraqi Alliance, and the Kurdistan Alliance (or the Kurdistan parties generally). But they might well decline to deal with him, and could seek to exclude him instead.

Al-Maliki's State of Law list campaigned hard against the resurgence of Baathism, and Allawi and many on his list are ex-Baathists, so al-Maliki would have to eat a lot of crow to accept a junior position in an Allawi government. It seems unlikely, even if politics makes for strange bedfellows.

The Shiite religious parties grouped in the National Iraqi Alliance are said by the exit polls (for the little they are worth) to be coming in third. They are also highly unlikely to ally with Allawi, since he is an old-time CIA asset and ex-Baathist whose interim government was hostile to the Shiite religious authorities and to Iran.

Allawi appears to be attracting strong support in Ninevah Province in the north, which returned an Arab nationalist party in the provincial elections of 2009. Ninevah has a Sunni Arab majority and a Kurdish minority, but the Kurds had been dominant in provincial government and the security forces because the Sunnis had sat out the provincial elections of January 2005. There is very bad blood between the Arabs and Kurds in Ninevah.

So Allawi will find it difficult to ally with the Kurds while keeping his Sunni Arab nationalist base. But not only would he need the Kurds to get a simple majority if the other two big coalitions spurned him, but it will take a multi-party coaltion of 215 or so members of parliament to elect a president.

Whereas the numbers don't easily add up for Allawi, it seems likely that the State of Law, the Shiite fundamentalist parties of the NIA, and some smaller parties willing to join the two of them, could easily get to over 163, and they have a proven ability to work with the Kurds and independents to get to 215. In order to block this scenario, Allawi's list would have to get well over 100 seats and be united and disciplined.

As I suggested Sunday, one price al-Maliki might have to pay to gain the National Iraqi alliance as a partner is to agree to accelerate the US troop withdrawal (a key demand of the Sadr faction in the NIA).

Whatever the outcome of the voting (and a projected result based on one-third of the votes is scheduled to be announced on Wednesday), it may not be easily accepted by the losers. There is tremendous anxiety in Iraq about the possibility of ballot fraud in the wake of Sunday's parliamentary elections. The Iranian Arabic-language satellite station al-Alam reported on Sunday that the Shiite fundamentalist Sadr movement was alarmed to hear that ballot boxes were being transported from the provinces to Baghdad by US troops, and insisted that the US be kept away from those boxes. (They must have heard about Florida in 2000). Allawi is on Al Jazeera complaining about irregularities. He didn't say this, but campaigning continued through Sunday althought it was supposed to be forbidden after Friday late afternoon. In Basra, al-Hayat reports that anti-Allawi pamphlets were dropped by helicopter on Saturday and Snday.

Bottom line, another Allawi prime ministership is unlikely even if his list turns in strong performance.