Back in 2008, we saw one of the most naked and tawdry displays of big-country power in recent memory, when the UK abused anti-terror legislation to freeze the assets of the Icelandic government to force it to guarantee the deposits of UK citizens in a collapsed Icelandic bank. Faced with this sort of pressure, the Icelandic government capitulated, and effectively sold its own people into debt-slavery, accepting a debt amounting to 40% of its GDP which it had no moral obligation for.
Last week, the Icelandic Parliament finally passed a law cementing the deal, providing for crippling payments to the UK and the Netherlands over the next 15 years. But there's a problem: the Icelandic people will not accept being enslaved to pay someone else's debts. 60,000 of them - 25% of the voting population - have signed a petition opposing the bill. And as a result, Iceland's President has delayed signing it into law, and looks set to invoke his rarely-used power to put a bill to a referendum. With 70% opposition, if it goes to a vote, the bill will lose. If it doesn't go to a vote, then there will almost certainly be a repeat of the mass public protests which forced the collapse of the previous government in 2009. And those protests will be repeated until a new government is elected which repudiates the unjust debt.
The UK government will be furious, and will no doubt threaten further asset freezes. But Iceland's people are not going to be enslaved. And if their politicians collaborate with foreign economic oppression, then they will roll them and get new ones.
