The EEA rules are considered too severe by an Icelandic public who largely dont want to join the EU and are ready to renege on the UK and Dutch depositors’ debt if given a vote on it as they feel they have little to lose.

The rub is that the Icelandic govt and regulator were negligent and complicit. So although its unjust to hold their tax payer negligent the govt they voted in was at fault, not the EEA OR ECB – and the public know this, having already voted out the previous conservative govt and put in a new socialist govt in may 09 and new regulators. There is a scenario painted of a small connected group of bankers and govt who have bankrupt the country. But this group is now in exile.
They have devalued the Krona by half at the IMF insistence and have inflation and interest rates at a level we saw here in the 70s.
Despite that my interviewee was proud of Icelands’s self-sufficiency and was optimistic about the country’s viability if UK and Holland drop the bully tactics ( he compared it to Cromwell coming back into Ireland to plunder!). They have great wind energy, electricity export and are one of the worlds biggest exporters of treated aluminium.

So where does that leave us- we are too open an economy, need more indigenous producers to seal the leaks caused by dependence on imports.
Our corporate governance has been all a bit Irish in the past. Our banks just followed the wall street trends and became sucked in. Our govt didnt push for balance or sustainability after McCreevy lost control because the Bert was no economist and building was the only show in town…

Nobody except maybe Vincent Browne and Jack OConnor could face listening to Joan Burton droning on about this for the rest of the year.
International confidence needs to see a clean breast of it.
The national mood is ripe for schadenfreude and catharsis and maybe as a society we need a few more symbolic sacred cows slayed.
I dont see the hype dissolving unless the issue is tackled.
So I am hoping an honest effective formula to discover and discuss is found.

If we opt for an Oireachtas committee investigation we will have an inquiry without the power to compel witnesses or make a finding against any individual. They couldn’t even bring Roddy Molloy to account and he was a civil servant. What do you think an employee of a private sector bank will do with the letter asking them to attend and give evidence. It will be a toss up between shred the letter or recycle it for toilet paper. Even if we do have an Oireachtas inquiry the “judges” in the case will be evenly divided in their desire to hang or save Brian Cowen. His guilt/innocence will already be predetermined by the make up of the committee. The TV coverage of the proceedings may earn high ratings for comic value but the general public will quickly dispair of the grandstanding and partisan showboating.

The other method is the good old fashioned tribunal. However I don’t think the public will accept another tribunal after the current endless tribunals effectively brought the whole system into question with their massive fees, never ending proceedings and zero results. Even now over a year since the last hearings the fees continue to roll in while there is still no sign of reports which could really be cut and paste together by a law student from past editions of the Irish Times. Also what are the chances of finding a senior judge to chair the Tribunal who doesn’t share a dinner party circuit with some of those being investigated.

Personally I’m starting to think the best option for the general public would be for no investigation to happen. That way we will have the same outcome (i.e. nothing significant) and save millions in expenses and fees.

How right you are on how slight the simmilarities are between our own predicament and Iceland’s, and thank heavens for that!

What’s the petition about by the way? And why does anyone take heart from recent events in iceland; presumably the referral to referendum of the Icesave deal(?). The universal lesson of history, surely, is that when your banking system fails all of society in one way or another gets to pick up the tab.

The Iceland problem brings the issue of EU-wide regulation into focus, I think, particularly as regards interstate banking rules.

As I understand it, it goes something like this: as an EEA member, Iceland complies with EU Directives requiring States to have a guarantee scheme in place for depositors with their banks. The government of Iceland fund the guarantee through a levy on their banks. Then, when the banks fail, the government discovers that they had not received complete information about the number of foreign-based depositors in Icesave and , in any case, can’t afford to stump up for the losses to these depositors, so the Dutch and British governments have to put up the cash to repay their own Icesave depositors.

Meanwhile, the Nordic countries who will provide much of the funding for IMF loans to Iceland, make that conditional on Iceland concluding a deal with Holland and the UK to reimburse them for their exchequer losses to Icesave depositors, to the tune of about €3.5bn, or about 50% of Iceland’s current GDP. A deal is agreed under duress, voted through the Icelandic parliament by one vote. The President of Iceland refuses to sign; thereby forcing a referendum, in which the proposition is likely to be overwhelmingly (and understandably) rejected by the electorate.

In all this, Iceland is caught between a rock and a hard place – no deal with the UK and the Netherlands means no IMF funding, which cripples their efforts to drag themselves back out of their current financial morass. Arguably, the UK might block Iceland’s application for fast-track entry to the EU, also crucial to its recovery plan. From what I’ve read the UK don’t come so well out of this, adopting an intransigent OTT attitude from the start and then digging their heels in without any regard for the implications of their hardline stance for the lives of Icelandic citizens. In short, bullying a vulnerable small country and also probably doing so as part of a government ploy to appear ‘strong’ in the run-up to a difficult election campaign, though that may be stretching it a bit.

But the real villain of the piece appears to be the EU, for allowing interstate banking to take place on the scale that it did during the boom years without ever seeking to clarify what the rules were as to who should pick up the tab in the event of bank failure, i.e. the state where the deposits are taken or the state in which ownership of the lending institution ultimately resides.

Since it’s not part of the EU, never mind the eurozone, Iceland has no leverage. Without the support of the ECB, it is an accepted fact that our financial system would have collapsed in the early part of last year. The real point of comparison between Iceland and Ireland, therefore, is the difference wrought through membership of the eurozone.

I think we can all empathise with the problems Iceland faces, and hope that for the sake of its people and their future that the EU brings pressure to bear on both the Netherlands and the UK to either back off entirely or agree a less punitive deal. We should also hope, I suppose, that our own dependence on EU and ECB goodwill will not deter our politicians from including an EU dimension to the terms of reference of our own inquiry.

Your idea for a ex-IMF / EU statesman to head it up seems like a good one. Presumably every variation and possibility for a suitable forum and suitable leadership is being thrashed out at length by the powers that be; so Tuesday’s post-Cabinet announcement should make for further interesting debate.

Thanks for the compliment, by the way. Now, if I had a penny for every one of those I receive for my efforts, I’d still be as poor as a church mouse!

I heard Pat Rabbittee on Morning Ireland a couple of days ago and he seemed to be about to say something that sounded quite interesting on the need for any inquiry to place emphasis on the regulatory failure when he got cut short. Personally I think some sort of inquiry is really important, and at the very least the government must make a statement of intent to establish one and set the wheels in motion.

I don’t have a party political position on any of this. It’s just something that needs to be done and, as you refer above, is also a factor in rehabilitating our international reputation. That’s provided it’s done sensibly with the minimum of self-serving political hoopla on all sides. I would be loathe to see something developing that’s just another media circus or a grandstanding opportunity for certain politicians, which is not what we need or deserve, given that it’s all of us, as a community, who now have to bear the pain and the cost of bailing out the banks.

I also think that the whole question of what happened and why, needs to be examined from a broader perspective than just an exercise to assign blame to our native bankers, regulators, auditors or public officials or provide ‘shock and awe’ salacious revelations on a daily basis for the benefit of the media. Some analyses I’ve read suggest, for instance, that the way the eurozone operates is structurally flawed; that in its early years surplus credit flowed out from the centre to peripheral areas, like Ireland and Spain, initially fuelling booms that later transformed into domestic bubbles. If there were serious flaws in our own regulatory framework, and it’s self-evident that was the case, it appears also that there are bricks and mortar missing from the eurozone system that it would be useful to pinpoint, if in fact they do exist, to avoid similar problems arising in the future.

From there it becomes self-evident – well to me, at least – that what is required is a Commission of heavy-weights, of people with in-depth political experience as well as individuals with appropriate expertise and knowledge of the international banking system and economics. I don’t believe that a parliamentary committee – with all due respect ot Pat Rabbitte and the other TDs who were part of the PAC inquiry – is strong enough to achieve what needs to be done. Nor do I believe that sitting deputies or senators should be part of any inquiry, except perhaps as witnesses, because that would immediately politicise the whole process.

As for looking to good communications on this from the government side; I hate to say it, but don’t hold your breath!

All of us would be loath to see another legal junket.
Your suggestion A for a commission or forum seems a good one.