The Specter of Debt Revolt Is Haunting Europe
Why Iceland and Latvia Won’t (and Can’t) Pay for the Kleptocrats’ Ripoffs
By MICHAEL HUDSON
August 18th 2009
Click here for more details of stipulations and conditions attached to Icesave deal as agreed by Icelandic parliament.
In the wake of the world crash populations are asking not only whether debts should be paid, but whether they can be paid! If they can’t be, then trying to pay will only shrink economics further, preventing them from becoming viable. This is what has led past structural adjustment programs to fail.
For the past decade Iceland has been a kind of controlled experiment, an extreme test case of neoliberal free-market ideology. What has been tested has been whether there is a limit to how far a population can be pushed into debt-dependency. Is there a limit, a point at which government will draw a line against by taking on public responsibility for private debts beyond any reasonable capacity to pay without drastically slashing public spending on education, health care and other basic services? Read the rest of this entry »
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