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Iceland joins the axis of evil?

30 Oct 08

40,000 Icelanders are incensed that the UK’s anti-terror legislation was used to freeze their banks’ UK assets, but there’s a wider lesson in all this

“We are not terrorists!” That’s the message in an online petition from the people of Iceland directed at UK Prime Minister Gordon Brown. Iceland, which has long regarded the British as friends across the sea, is still smarting after the events of earlier this month, when the UK government used anti-terror legislation to freeze the UK assets of stricken Icelandic banks. 

Of course, nobody has accused the Icelanders of terrorism (at least, not since the days of the Viking raiders). The move was made to safeguard the assets of UK depositors when Iceland’s banks fell victim to the turmoil that has hit the whole world’s financial system.

The British point of view is that drastic action was necessary to protect individual savers, local authorities and others who might have lost out if the Icelandic government gave top priority to protecting its own residents’ assets. Iceland’s PM, Geir Haarde, has accused the UK of “bullying”.

Talks have been going on to find a mutual solution and repair the rift between the two countries. In the meantime, it strikes me that the lesson is this: whatever the original rationale - climate change, international terrorism or anything else - once a government has been given emergency powers, it can end up using them for anything it wants to.

That’s not to say the UK government was wrong in this case - but it should give us pause for thought next time we’re asked to support new powers for the state. They may end up being used against the most unlikely of targets.
 

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banks | Iceland
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