A E4bn loan from Russia might make financial sense – although Russians might think otherwise given Moscow’s shaky finances. But it would create strategic ructions. Iceland is a NATO member, but Russia would want something in return for a loan equal to almost a third of the tiny state’s GDP. The US would fret this could eventually mean a Russian military presence in the North Atlantic.
Here is the story. It seems that Iceland may prefer Russia to the IMF, but Russia does not yet seem on board. I can only wonder what Bobby Fischer would have said…
If only we could have seen Bobby Fischer versus Kimbo Slice in chess-boxing, with press conferences in between, complete with title unification controversy.
It would have been like all the Rocky movies rolled into one, but with chess. Alas, we’ll have to wait for Stallone to do a chess (or competitive checkers) movie.
Russian economic performance has a 0.99 correlation with the price of oil– that is higher than in Saudi Arabia.
If i were a Icelandic Treasury official with the price of oil collapsing I would seriously doubt the ability of the Russians to help me.
I’m no expert, but I would guess the Russian offer has a lot to do with the huge amount of Russian money in the Icelandic banking sector. From what I understand, a lot of oligarch wealth resides in Icelandinc banks.
“From what I understand, a lot of oligarch wealth resides in Icelandinc banks”
The theory is that Samson Holding, owned by businessmen Björgolfur Gudmundsson and son Björgolfur Thor Björgolfsson, made huge profits in Russian in the 1990′s when they started up breweries in Russia, backed up by the Russian mafia (propably making profits on the side via a deal with two Björgolfs). Samson then went on to buy Landsbanki, one of Iceland’s three banks a few years back, and started up Straumur Investment Bank later on. But direct financial links from Russia or Russian oligarchs to the current ownership has never been made, at least not to my knowledge.
“Russian trawlers and other fishing ships visit Iceland frequently, and the two nations both admire each other’s sophisticated literature heritage.”
There is an Icelandic literature
?
You have to consider this in perspective: Icelanders where not very happy about being abandoned by the US a couple of years back, when Bush closed the US Keflavik military base in Iceland. Today, Iceland do not have any armed forces, and relies completely on NATO for any defence and security needs. But at present, NATO appears to be far more interested in stupid US missions far away from the North Atlantic than anything else.
Good relations to Russia would serve as a proper pay-back to Bush for his negligence of the region.
Secondly, the rest of Scandinavia is quite unhappy with current US foreign policy as well. Norway is currently discussing whether to buy Lockheed Martin’s Joint Strike Fighter or SAAB’s JAS Gripen as their new fighter plane. After being the superior favourite in the initial stages of the competition, the JSF is now haunted with US foreign policy, which Norwegians are desperate to distance themselves from. Hence the political signals from buying the Gripen instead is more than tempting for Norwegian politicians before next year’s elections.
I think the Bush administration should consider very carefully to change their North Atlantic policy, and start out by helping the Icelanders out, and show real interest in the region. Further negligence can have significant consequences for the US influence in future developments of the entire arctic region. Imagine a Russian airbase and naval base in Iceland, in combination with a chilly Scandinavia, when setting the borders and negotiating the codes of conduct over the soon-to-be ice-free arctic?
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