As we mentioned on Wednesday, things were looking pretty bad for Iceland when the U.K. threatened to sue the country over lost deposits held by 300,000 Brits in Icelandic banks.
Well, today, British treasury officials started to fly out to Reykjavik for emergency discussions now that U.K. Prime Minister Gordon Brown has declared diplomatic war on Iceland.
It seems that the collapse of three Icelandic banks is even greater than the $1 billion known to be at risk.
So, as of yesterday, Brown has launched an attack against Iceland for their ‘illegal’ refusal to pay back the billions it owes to British investors after their banks failed.
Brown used “anti-terrorism powers to freeze Icelandic assets as fears grew that vast sums of British cash could be lost.”
Many private companies, charities, town halls, and more have lost about $27 billion in Iceland.
Many are fearing that Iceland is now pretty much a bankrupt state and owes their investors over $47 billion.
Brown said, “We are freezing the assets of Icelandic companies in the UK where we can. We will take further action against Icelandic authorities wherever necessary to recover the money. I don’t apologise for it. This is a very unusual situation, where a country has effectively defaulted.”
As for Iceland, its prime minister, Geir Haarde said he was disappointed with the lack of assistance he’s received from Western countries.
Uhmm, hello! No one wants to be friends with a country that takes your money and won’t return it. No one except for crazy Russia, which has even offered Iceland a $5 billion loan.
With times as bad as they are, we need to be careful where we put our money.
[Image via WENN.]
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