The Trump Regime's Response To The Pandemic Is The Worst In The World But Some Countries Are Getting It Right

COVID-45 by Nancy Ohanian

Chris Martenson, who insists, convincingly, that he is apolitical, has been excoriating the Trump regime's response to the pandemic for months. For nearly as long, he has been holding up the Czech Republic (Czechia) as a model of effective response, primarily because of how quickly and effectively the government got the whole country to wear face masks. After an initial surge in mid-March-- which has led to 6,606 confirmed infections and 181 deaths-- the curve has begun to flatten far more significantly than it has in Italy, Spain, France and the U.K. This is the rate of infection in European countries that are testing, per million in population (as of Saturday morning):

• Spain- 4,101
• Belgium- 3,208
• Switzerland- 3,166
• Italy- 2,910
• Ireland- 2,831
• France- 2,267
• Portugal- 1,931
• Netherlands- 1,844
• Germany- 1,702
• Austria- 1,629
• U.K.- 1,682
• Sweden- 1,369
• Norway- 1,298
• Denmark- 1,250
• Estonia- 1,140
• Czechia- 617

Last night we highlighted Japan, a country that was responding pretty well but, like Switzerland, started opening up too fast and is now suffering dismal consequences-- a model Trump seems determined to use for our country. Last week, CNN tried identifying countries that are doing it right.

Taiwan, they reported, started off with terrible numbers, courtesy of China. But Taiwan, with a population of around 24 million people, has recorded just over 398 cases and six deaths-- just 17 infections per million in the population and, astonishingly, just 0.3 deaths per million. [For comparison's sake, the U.S. now has 2,158 infections per million and 113 deaths per million.] CNN reports that Taiwan has "managed to do that without implementing severe restrictions, like lockdowns, or school and nursery closures... Although Taiwan has high-quality universal health care, its success lies in its preparedness, speed, central command and rigorous contact tracing."

Lesson #1: Be prepared

Taiwan's preparedness came largely from some hard-learned lessons from the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003, which killed 181 people on the island.

As a result, the island established a specialized Central Epidemic Command Center, which could be activated to coordinate a response in the event of an outbreak. In a sign of how Taiwan wanted to get ahead of the coronavirus, the center was activated on January 20, a day before the island even confirmed its first infection.

Because its authority was already established, the center was able to implement stringent measures without being slowed down by lengthy political processes. It put more than 120 action items into place within three weeks, according to a list published by the Journal of the American Medical Association (JAMA). That list alone could serve as a manual on exactly what to do during an outbreak.

Lesson #2: Be quick

Taiwan's action came well before its first Covid-19 infection was confirmed on January 21. Three weeks before, within days of China's first reported case to the World Health Organization (WHO), Taiwanese officials began boarding and inspecting passengers for fever and pneumonia symptoms on flights from Wuhan, the original epicenter of the virus in China. The island issued a travel alert for Wuhan on January 20, and two days later, still with just a single case, officials began updating the public in daily briefings.

A week after its first case, Taiwan began electronic monitoring of quarantined individuals via government-issued cell phones, and announced travel and entry restrictions, mostly targeting China's Hubei province, of which Wuhan is the capital. Just about every day after until the end of February, the government implemented new measures to keep the virus at bay.





Taiwan had only 329 cases when it imposed strict social distancing measures on April 1. In comparison, there were already 335 deaths and more than 3,000 cases on March 20, when Prime Minister Boris Johnson announced that pubs and restaurants were to close, and that most children would be pulled from schools and nurseries. And as the UK is not testing widely, the true number of infections is believed to be much higher than official figures show.

Lesson #3: Test, trace and quarantine

Authorities carried out widespread testing and tracing the contacts of infected people, putting them all under quarantine. It proactively tested anyone who got off cruise ships and even retested people diagnosed with influenza or pneumonia, to make sure they hadn't been misdiagnosed and were infected with coronavirus.

Lesson #4: Use data and tech

"A coordinated government response with full collaboration of its citizenry [was] combined with the use of big data and technology," associate professor of pediatrics at Stanford Medicine, Jason Wang, told CNN. Wang has also studied public health policy and co-authored the JAMA report on Taiwan's response.

Taiwan merged national health insurance data with customs and immigration databases to create real-time alerts to help identify vulnerable populations.

"Having a good health data system helps with monitoring the spread of the disease and allows for its early detection. When someone sees a physician for respiratory symptoms, the national health insurance database will have a record of it. It is easier to track clusters of outbreaks," Wang said.

Taiwan used mandatory online reporting and check-ins for 14 days after travel restrictions. It also employed "digital fencing" for close to 55,000 people in home quarantine, where alarms would sound if a quarantined person wandered too far from home. The technical surveillance methods used in Taiwan and by other governments have raised privacy concerns from civil society groups.

Iceland

Getting a coronavirus test in many countries can be near impossible, unless you're already very ill. Not so in Iceland, where anyone who wants a test gets one. Widespread testing has been crucial to the country's low number of infections and deaths, authorities there say. Only around 1,700 people have been infected in Iceland, and only eight have died.

Lesson #5: Be aggressive

Iceland's response to the coronavirus hasn't been particularly innovative. It's just been meticulous and quick. Like Taiwan, its speed has meant it hasn't had to be too restrictive-- people can still meet in groups of up to 20, if they stay two meters away from each other. While universities are closed, schools and nurseries are still open, allowing more parents to work.

"From the beginning, since we diagnosed our first case, we worked according to our plan. Our plan was to be aggressive in detecting and diagnosing individuals, putting them into isolation, and to be very aggressive in our contact tracing. We used the police force and the healthcare system to sit down and contact trace every newly diagnosed case," Iceland's chief epidemiologist Thorolfur Gudnason told CNN.

"We are finding that above 60% of new cases are in people already quarantined. So that showed that contact tracing and quarantining contacts was a good move for us," Gudnason said.

Lesson #6: Get the private sector involved

In a public-private partnership between the National University Hospital of Iceland and biotech company deCODE Genetics, Iceland designed tests early and expects to have tested 10% of its population by the end of this week. It aims to test just about everyone and has already become a valuable laboratory for the world to learn more about the novel virus.

Recent revelations that 50% of the people who tested positive in a lab in Iceland showed no symptoms at all, for example, has prompted other countries to take firmer action through social distancing, as they begin to realize preventing the virus' spread will be more challenging than initially thought.

Kári Stefánsson, CEO and director of deCODE Geneticsm, told CNN that as of Monday, it had found 528 mutations of the coronavirus in mass testing in the community. These mutations could give insight to how lethal the virus becomes and offers important data to the world to better understand how it operates.

Lesson #7: Act preventatively

Icelandic Health Minister Svandís Svavarsdóttir has emphasized speed as a powerful tool, saying the approach is to stay "ahead of the curve." The country appears to have done just that. After just six imported cases were confirmed on March 3, Iceland immediately issued quarantine measures for all travelers returning from Italy, and increased travel restrictions in the following weeks.

The National Police Commissioner declared a state of emergency on March 6, when the first two community-transmitted infections were confirmed. This sent a signal to government bodies to improve their preparedness, but it kept public gatherings as they were, only warning vulnerable people to stay away from crowded places.

The country closed universities and junior colleges on March 13 and banned gatherings of more than 100 people on March 16, when it had just 61 confirmed cases and not a single death.

Three days later, all Icelandic residents that entered the country were required to go into 14 days of quarantine, regardless of where they were traveling from.

It wasn't until after all this action that, on March 24, Iceland's first death was reported. That same day, authorities banned gatherings of above 20 people and shut down public amenities, such as bars, swimming pools, museums and gyms.

Lesson #8: Use tech, but respect privacy

Like in Taiwan, Icelandic officials also made an app available for people to download to help chart the virus' spread. It creates a log of where the user has been. Users don't have to share that data with authorities-- but many do as it helps contact-tracing teams work out who may have been put at risk.

In comparison, the UK's response has been slow. A government-supported app is only now in the works and is weeks away from launching. As it lags behind in testing, it is only just now looking into public-private partnerships.

South Korea

It's telling that South Korea reported its first coronavirus case at around the same time as the US and UK. South Korea is confirming around 30 new cases a day, while in the UK it's around 5,000, and the US it's more than 20,000.

The way each country tests varies, but their death rates among the population contrast just as dramatically. Fewer than one in every 100,000 people in South Korea's population have died from the virus, while in the UK it's around 18. It's almost eight in every 100,000 in the US, JHU data shows.

Lesson #9: You can drive-through test

South Korea's success has been largely down to its testing, according to Dr. Eom Joong Sik from the Gil Medical Center near Seoul. Eom is treating coronavirus patients in hospital and sits on a committee that advises the government in its response.

"Early diagnosis, early quarantine and early treatment are key," he told CNN.

"Since the first patient was confirmed, by installing more than 500 screening clinics all over the country, we sorted suspected cases and conducted tests, and we have worked hard to develop and maintain a system to conduct many tests with a small workforce over a short period of time," he said.

The country has also been innovative in how it tests. Eom's advisory team had hundreds of drive-through booths, just like at a McDonald's, set up across the country to offer tests that were largely free, quick and done by staff at a safe distance. The US has since replicated that model in some states.

On March 16, the WHO called on governments of the world to "test, test, test." South Korea had already been doing that for weeks, and has to date tested more than 500,000 people, among the highest number in the world per capita.

Many countries are struggling to carry out thousands of tests each day. It's so difficult to get tested in the UK, for example, that people have been turning to mail-order kits, in an industry that hasn't yet been regulated by the government.

South Korea was also quick to move, implementing quarantining and screening measures for people arriving from Wuhan on January 3, more than two weeks before the country's first infection was even confirmed. Authorities rolled out a series of travel restrictions over the weeks after.

South Korea has also been rigorous in its contact tracing, though it was able to do that easily when it realized a large number of cases could be traced to one religious group in the city of Daegu, making contact tracing easier and giving authorities a specific area to carry out intensive testing.

"By carrying out tests on all members of the congregation and diagnosing even infected people without symptoms, the government carried out quarantine and treatment side by side," Eom said.

Once Daegu was established as the epicenter, authorities were ready with the ability and political will to test broadly, to trace contacts of people infected, and to quarantine them to try and contain the virus before it became a case of mitigating widescale death, as is now the case in much of Europe and the US.

Lesson #10: Learn from the past

South Korea was able to move quickly because, like Taiwan and many other Asian nations, it had been burned before. South Korea was mostly unaffected by the SARS outbreak, only reporting three cases and no deaths at all. But it was caught off guard by the Middle East Respiratory Syndrome in 2015, when it recorded 186 cases and 38 deaths, making it the worst-impacted country outside the Middle East.

So the political will needed to enforce measures during the coronavirus outbreak wasn't a problem and there was good coordination between the central government and the provinces.

It also helped that South Korea is one of the most technologically innovative countries in the world. Much of life there is already conducted online, so developing and enforcing the use of an app to monitor people in quarantine wasn't too difficult, though activists there too have warned of invasion of privacy.

Germany

Germany's case is a little different. The country hasn't really been able to keep infection numbers at bay much better than some of the hardest-hit nations. It currently has more than 132,000 confirmed infections, the fifth-highest in the world, JHU reports.

But Germany has been able to keep the death rate in its population relatively low. More than 3,400 people have died from the virus in Germany, around four people in every 100,000 across the country. That's well below Italy's 35 and the UK's 18.

Lesson #11: Test more as restrictions ease

Germany's success has also been its mass testing, but its well-resourced universal healthcare system has played a major role too, according to Martin Stürmer, a virologist who heads IMD Labor in Frankfurt, one of the labs conducting tests. Germany has also drawn in the private sector to make sure enough tests are carried out.

"From the beginning, Germany didn't stick to one or two or three central labs doing all the tests. Many private companies were involved, so we've been able to do 100,000 tests a day," Stürmer told CNN.

"There are some countries that have done it even better than Germany, in controlling infections, but what's quite important is broad testing, where we were able to see what was happening in our population. Only with mass testing can you identify people who might be infected."

Like Taiwan, South Korea and Iceland, Germany devised a test for the coronavirus and prepared a large number of kits early, well before the country even reported its first death.

As German Chancellor Angela Merkel announced Wednesday that the country would begin gradually scaling back its lockdown, the country is planning on carrying out even more tests, in case the increased contact leads to a second wave of infections. Like many countries, it will also test for antibodies to try and determine who among the community may be immune to the virus.

Germany's death toll has remained relatively low in part because the coronavirus trickled into the country mostly in young people. Many had been visiting Italy or Austria on ski trips.

Authorities were able to test people returning to Germany from these ski resorts and trace their contacts for testing too. Most of those people were young, and still today, the biggest age group by infections is 35-59, followed by 15-34. The virus is proving to be deadlier among the elderly around the world.

But as communal infections in the country grow, Stürmer fears that more elderly people could die in coming weeks and that the country's death rate will go up.

Germany recorded 315 deaths from complications related to Covid-19 in the past 24 hours, the country's center for disease control, the Robert Koch Institute, wrote on its website on Thursday. This is the first time more than 300 deaths have been reported in a 24-hour span.

Lesson #12: Build capacity at hospitals

Germany ranks 18th in the world in terms of access to quality healthcare, according to an index published by The Lancet, sitting above the UK at 23rd and the US at 29th. But these indices only tell us so much. Italy, for example, ranks ninth and the country also carried out rigorous testing, yet it has recorded the second-highest number of deaths per capita in the world, after Spain.

In this situation, the difference appears to be the German healthcare system's huge capacity. Germany is projected to need about 12,000 beds at the peak of this outbreak in the middle of the month, according to projections from the Institute for Health Metrics and Evaluation. It has over 147,000, more than 10 times its need. In contrast, the US has around 94,000 beds, some 15,000 beds short of its need. Germany has more spare beds in intensive care units that Italy has altogether.

In fact, Germany's health system has such a large capacity, its hospitals are now treating people for coronavirus from Italy, Spain and France.

Authorities have been able to get people with even moderate symptoms to hospital well before their conditions deteriorate, leading some experts to consider whether treating people early, getting them on ventilators before their condition worsens, for example, improves their chances for survival.

"Germany is not in a situation where the healthcare system is overloaded, like you see in Italy, where they need to decide whether to treat a patient or not. We don't have that," Stürmer said.

Progressive Texan Julie Oliver is running for a congressional seat held by Trump doormat Roger Williams. This morning she told me that "Texas is dead last in testing, and states are begging the Trump administration for PPE, ventilators, and tests which he is refusing to provide. Too many people are hurting because they just lost their job, and are now faced with not having a health insurance, a reality that 5 million of our fellow Texans already know too well. This district deserves better than a Congressman who won't fight for PPE for healthcare providers, and who let a bill designed to help small businesses become almost immediately depleted by providing $90 billion a year for millionaire real estate and hedge fund business owners. They gave trillions in tax cuts to multinational corporations that used the money for stock buybacks and who shipped the jobs overseas. They voted again and again to defund and cut our healthcare infrastructure, so that when the bottom fell out there's no net and no plan to get us out. We can not entrust the rebuilding of the Texas economy to the people that have driven us into the second world historical recession in 15 years." Please consider helping Julie beat Williams at the Take Back Texas Act Blue page here and contributing what you can.

Panama's Mossack Fonseca Has Certainly Become Very Famous Over The Weekend... Here's Why

I bet everyone inside Fortress Hillary in Brooklyn breathed a sign of relief when the Panama Papers of money launderers and assorted financial criminals started leaking and didn't show any Clintons, Mezvinskys or any of the other shady characters they've surrounded themselves with. I'm told, though, there's plenty more to come. The first political casualty seems to be Sigmundur David Gunnlaugsson, the right-wing prime minister of Iceland who had set up a secret company in the British Virgin Islands to shelter investments with his rich partner, Anna Sigurlaug Pálsdóttir, who he later married. He didn't disclose his investment when he ran for Parliament, even though it included shares in 3 of Iceland's failed banks. Though there is mounting pressure on him to do so, as of this writing, he hasn't resigned yet. People are running around Reykjavik chanting the old slogan from the 2008 financial collapse, "Vanhæf ríkisstjórn," roughly "unfit/unqualified Government." Do you watch The Vikings on the History Channel? You don't want to piss these people off. [UPDATE: Gunnlaugsson resigned today.]

This is what Bernie had to say during the debate on the Panama Free Trade Treaty supported by Republicans and the Republican wing of the Democratic Party. Hillary supported the treaty, of course. But read Bernie's statement carefully:

Lastly, let me say a brief word about Panama and the Panama free-trade agreement. Panama's entire economic output is only $26.7 billion a year or about two-tenths of 1 percent of the U.S. economy. Nobody can legitimately claim that approving this free-trade agreement will significantly increase American jobs.

Then why would we be considering a stand-alone free trade agreement with Panama ? It turns out that Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in offshore tax havens. The Panama Free Trade Agreement will make this bad situation much worse.

Each and every year, the wealthiest people in our country and the largest corporations evade about $100 billion in U.S. taxes through abusive and illegal offshore tax havens in Panama and other countries.

According to Citizens for Tax Justice:

A tax haven... has one of three characteristics: it has no income tax or a very low rate income tax; it has bank secrecy laws; and it has a history of non-cooperation with other countries on exchanging information about tax matters. Panama has all three of those... They're probably the worst.

 This is the (very) short version of what this whole Mossack Fonseca scandal is all about. The secret files:

• Include 11.5 million records, dating back nearly 40 years-- making it the largest leak in offshore history. Contains details on more than 214,000 offshore entities connected to people in more than 200 countries and territories. Company owners in billionaires, sports stars, drug smugglers and fraudsters.

• Reveal the offshore holdings 140 politicians and public officials around the world-- including 12 current and former world leaders. Among them: the prime ministers of Iceland and Pakistan, the president of Ukraine, and the king of Saudi Arabia.

• Document some $2 billion in transactions secretly shuffled through banks and shadow companies by associates of Russian President Vladimir Putin.

• Include the names of at least 33 people and companies blacklisted by the U.S. government because of evidence that they’d been involved in wrongdoing, such as doing business with Mexican drug lords, terrorist organizations like Hezbollah or rogue nations like North Korea and Iran.

• Show how major banks have driven the creation of hard-to-trace companies in offshore havens. More than 500 banks their subsidiaries and their branches-- including HSBC, UBS and Société Générale-- created more than 15,000 offshore companies for their customers through Mossack Fonseca.

The story is humongous around the world but has been tamped down here in the U.S. So far 140 politicians and thousands and thousands of millionaires and billionaires-- from around the world-- have been exposed as tax evaders. The Russian government dismissed it as just some standard Putinphobia. He can use that same tactic Hillary uses-- how his enemies just always have it out for him, which is true, but doesn't mean he doesn't sometimes commit some crimes, like squirreling away $2 billion. Others named include relatives of Chinese leaders including President Xi Jinping, David Cameron's crooked father, Pakistani Prime Minister Nawaz Sharif, well-known criminal Petro Poroshenko, the President of Ukraine, and some nuclear bomb-building North Koreans. I think this story will have legs.

Kevin Brady (R-TX), chairman of the House Ways and Means Committee announced he plans to draft American international tax reform legislation immediately. (The horse went thataway!) The main purpose will, of course, be to lower taxes on the rich and on corporations. Matthew Yglesias did a solid explanation of what's going on with this whole mess yesterday.

Mossack Fonseca is not a household name, but the Panamanian law firm has long been well known to the global financial and political elite, and thanks to a massive 2.6 terabyte leak of its confidential papers to the International Consortium of Investigative Journalists it's about to become much better known. A huge team of hundreds of journalists is pouring over the documents they are calling the Panama Papers.

The firm's operations are diverse and international in scope, but they originate in a single specialty-- helping foreigners set up Panamanian shell companies to hold financial assets while obscuring the identities of their real owners. Since its founding in 1977, it's expanded its interests outside of Panama to include over 40 offices worldwide, helping a global client base to work with shell companies not just in Panama but also the Bahamas, the British Virgin Islands, and other notorious tax havens around the world.

The documents provide details on some shocking acts of corruption in Russia, hint at scandalous goings-on in a range of developing nations, and may prompt a political crisis in Iceland.

But they also offer the most granular look ever at a banal reality that's long been hiding in plain sight. Even as the world's wealthiest and most powerful nations have engaged in increasingly complex and intensive efforts at international cooperation to smooth the wheels of global commerce, they have willfully chosen to allow the wealthiest members of Western society to shield their financial assets from taxation (and in many cases divorce or bankruptcy settlement) by taking advantage of shell companies and tax havens.

If Panama or the Cayman Islands were acting to undermine the integrity of the global pharmaceutical patent system, the United States would stop them. But political elite of powerful western nations has not acted to stop relatively puny Caribbean nations from undermining the integrity of the global tax system-- largely because western economic elites don't want them to.

UPDATE: And, Yes, We Have An Americano

One of the first Americans identified in the rapidly unfolding Panama scandal is high-profile notorious Wall Street sleaze-bag Benjamin Wey, president of New York Global Group. You may recall that he was indicted last year on 8 counts of securities fraud, stock manipulation, money laundering, and wire fraud for his role in a fraudulent scheme to profit from undisclosed, controlling ownership interests in several companies. His wife, sister and two of his attorney's were also indicted for "the aiding and abetting of violations of the antifraud provisions and the disclosure and reporting provisions of the federal securities laws." Among the American politicians he had bribed with campaign contributions are sleazy pro-Wall Street Democrats from the corporate wing of the party: New Dems Joe Crowley and Sean Patrick Maloney and Blue Dog Steve Israel (with a $20,000 "contribution" to the DCCC on September 30, 2013). Wey has also given money to the most corrupt of the Vegas politicians, Harry Reid. The revelations will only get more interesting. This morning's Chicago Tribune:

Benjamin Wey is a U.S. citizen and president of New York Global Group. He was indicted last year, along with his Swiss banker, Seref Dogan Erbek, on securities fraud charges. Wey's alleged scheme to conceal a true ownership interest in publicly traded companies was at the heart of the charges. Wey is accused of using offshores set up with Mossack Fonseca to disguise complicated transactions between Chinese operating companies and publicly traded U.S. shell companies.

The two "are believed to have profited in the tens of millions, while victim shareholders were left holding the bill," Diego Rodriguez, an FBI official involved in the case, said in a statement at the time of indictment.

Crowley and Maloney, widely considered two of the most corrupt of the Wall Street-owned New Dems, have refused to divest themselves of the bribes from Wey. Needless to say, the DCCC won't give up the $20,000 Steve Israel brought in from him either.

Ukraine's Tragic Mess-- And Iceland's Move Against Bankster-Imposed Austerity

Yesterday, on my travel blog, we took a little look at the demands in Thailand that Prime Minister Yingluck Shinawatra, sister of deposed right-wing populist Thaksin Shinawatra, resign. There are widespread anti-government demonstrations and increasing police reaction-- which have already led to several deaths and scores of serious injuries. Ukraine looks like it could be even worse. Hundreds of thousands of demonstrators want to see their country move out of the Russian orbit and towards the E.U. And they're demanding that President Viktor Yanukovich resign. This morning a no-confidence vote in Parliament failed, frustrating hundreds of thousands of self-styled "revolutionaries."

“I want the authorities to know that this is not a protest; this is a revolution!” Yuri V. Lutsenko, a former interior minister and an organizer of the Orange Revolution nine years ago, told a vast crowd here in Independence Square that many observers said outstripped even the biggest gatherings in 2004.

“Revolution!” the crowd roared back. “Revolution!”

Eleven days of intensifying protests over Mr. Yanukovich’s refusal to sign political and free trade accords with the European Union have now directly shaken the president’s prospects of remaining in power. Cracks have begun to emerge in his political base: His chief of administration was reported to have resigned, and a few members of Parliament quit his party and decried the police violence.

Many Ukrainians see the agreements with Europe as crucial steps toward a brighter economic and political future, and as a way to break free from the grip of Russia and from Ukraine’s Soviet past. Now, the outcry over Mr. Yanukovich’s abandonment of the accords is pushing Russia into a corner.

The Kremlin, which has supported Mr. Yanukovich as a geopolitical ally for years despite its frequent annoyance with him, used aggressive pressure to persuade him not to sign the accords. Now the anger over Russia’s role has made it all but impossible for Mr. Yanukovich to take the alternative offered by the Kremlin-- joining a customs union with Russia, Belarus and Kazakhstan. Any compromise with the protesters would have to revive the accords with Europe, and reduce Russia’s sway.

Even as Mr. Yanukovich was said to be considering declaring a state of emergency, parliamentary leaders began contemplating various ways to curtail his powers, rather than remove him from office entirely. Volodymy Rybak, the speaker of the Parliament, which is controlled by Mr. Yanukovich’s Party of Regions, on Sunday called for “round-table talks” to help resolve the crisis. Similar talks were conducted in 2004 to resolve the disputes that set off the Orange Revolution.

The steady escalation of the protests-- and the threat of further violent crackdowns-- has created a volatile situation that showed no sign of abating.

More violence erupted on Sunday afternoon when demonstrators clashed with a battalion of police officers guarding the presidential administration building. Smoke bombs and stun grenades were set off, and the police responded with tear gas.

The authorities reported Sunday night that about a hundred police officers and more than 50 protesters were injured, including some with burns to their eyes from tear gas. Witnesses said that some protesters, including women, were beaten brutally.

The police made scattered arrests, but did not immediately release a tally.

Protest leaders said they intended to make Mr. Yanukovich a prisoner in his own capital on Monday, with streets blocked, government buildings surrounded or occupied and possibly a general strike by workers and students. A map was posted on Facebook showing supporters where to put their vehicles to obstruct traffic.

By Sunday evening, demonstrators had taken police barriers meant to keep them out of Independence Square and repositioned them to mark their own control of a large area in the city center.

There were demonstrations in cities like Lviv and Chernivtsi, in the generally pro-European western part of Ukraine, and also in the predominantly Russian-speaking east, which tends to favor close ties with Moscow and where Mr. Yanukovich has his main base of support. Several thousand people rallied in Dnipropetrovsk in the southeast, defying a court order banning a protest there. Even in Donetsk, Mr. Yanukovich’s hometown in the east, hundreds rallied in favor of European integration.

Serhiy Lyovochkin, the chief of the presidential administration staff, reportedly resigned on Saturday over the crackdown. At least five lawmakers from the Party of Regions spoke out forcefully against the police violence, and at least two, David Zhvania and Inna Bohoslovska, said they had quit the party. Ms. Bohoslovska sent a text message to a protest leader, Yegor Sobolev, telling him: “If I can be useful, I am here. Let’s go to the rally.”

There were signs that some of Ukraine’s wealthiest business leaders, known as oligarchs, were turning against Mr. Yanukovich as well, or at least were positioning themselves for a major shift in the government. Mr. Sobolev said that a television channel owned by Rinat Akhmetov, Ukraine’s richest man, invited him to appear in prime time, which he took to be an effort by Mr. Akhmetov to reach out to the opposition.

The Orange Revolution in 2004 also centered on mass protests against Mr. Yanukovich, in response to blatant election fraud that made him the easy winner of the presidential election that year, contradicting early returns and exit polls that showed him losing to Viktor A. Yushchenko. The protests led to a new election that Mr. Yushchenko won, but Mr. Yanukovich made a comeback in 2010, defeating Yulia V. Tymoshenko, the former prime minister. Ms. Tymoshenko has since been prosecuted and imprisoned for abuse of authority.

Although Mr. Yanukovich condemned the police violence on Saturday and promised an investigation, his government drew heavy international criticism, including from the United States.

The chief of the Kiev police, Valery Koryak, submitted his resignation on Sunday, saying he had given the order to use force, though it was not clear whether he had control over the officers involved. The interior minister, Vitaliy Zakharchenko, did not accept the resignation, but said he was suspending Mr. Koryak pending the investigation.

Demonstrators in Kiev waved blue and yellow Ukrainian and European Union flags and chanted “Thieves out!” “Shame!” and “Criminals behind bars!” The crowd included the young and old, parents carrying small children on their shoulders and students who occasionally chanted the names of their schools as they marched. Every so often, another cry would go up: “Revolution! Revolution!”

Adrian Karatnycky, an expert on Ukraine with the Atlantic Council of the United States, a research group, said the protests were initiated by members of a new post-Communist generation who are increasingly frustrated that their country seems stuck in the past.

“The Euro-revolution is a mobilization around an aspiration-- Ukraine’s development along a European path,” Mr. Karatnycky said.

The video up top is a discussion from a more Russian perspective than the pro-western report from the NY Times. It's as important to watch the clip as it is to read the Times' report. It's also important to keep in mind that Ukraine is a massive country with 45 million people, a bigger population than Poland and about the same as Spain. And at stake here, at least in the near term, are the lives of millions and millions of ordinary Ukrainians caught in the crossfire, not in the crossfire between the pro-Russian police and the pro-E.U. "revolutionaries," as much as the crossfire between economic forces that are grinding them down. Iceland is going about creating a better future for ordinary citizens in a much different way-- and it's Americans as well as Ukrainians who should be paying close attention. In a huge anti-Austerity move over the weekend, Iceland announced a big a mortgage debt relief package. Like American homeowners, Icelandic mortgage holders were the victims of banister shenanigans that led to an economic collapse. Like our own, Iceland's economy is recovering-- but "many households are saddled with mortgages they cannot afford to repay, squeezing consumer spending and economic growth."

"The plan will assist over 100,000 households," Prime Minister Sigmundur Gunnlaugsson said. "This will be the beginning of an economic renaissance."

Debt relief will apply to some 1.36 trillion krona in mortgages linked to inflation, with a maximum limit of 4 million krona per household and totalling around 80 billion krona over the four-year period of the programme.

Mortgage holders will also be given tax breaks to encourage them to use pension savings to pay down their borrowing, a measure worth about 70 billion krona.

…The government said it would finance the measure through tax hikes on financial institutions and a haircut on around $4 billion in debts owed to overseas investors in Iceland's failed banks, which collapsed in late 2008.

Those debts are now mainly held by hedge funds, which bought them at a deep discount.

"The net impact on the Treasury is expected to be insignificant each year during the period 2014-2017," the government said.

Can Iceland Give NSA Whistle Blower Asylum Before The Gulag Swallows Him Up?

Predictably, uptight Military Industrial Complex shills like Peter King (R-NY) and Mike Rogers (R-MI), were on the Sunday TV gab fests howling for the blood of Edward Snowden, the 29 year old ex-NSA employee/technical engineer for defense contractor Booz Allen Hamilton. Snowden came forward and outed himself as the source of Glenn Greenwald's explosive exposé about NSA domestic spying in The Guardian last week. Eric Cantor chimed in this morning that the House investigation will be "very serious." Does that mean he won't give the investigation to GOP clown Darrell Issa? And does it mean the "very serious" investigation will be of the program itself, rather than of the whistleblower? Don't count on it. Watch Cantor dodge the few direct questions the corporate media talking heads asked him:



Snowden is in Hong Kong, and the U.S. has a bilateral extradition treaty with that... "country." Meanwhile, Glenn Greenwald was on Morning Joe with the moron team. The video is up top and I strongly recommend you watch it. Glenn's point (in his TV appearances): the NSA leak doesn't jeopardize national security. "There’s not a single revelation that we’ve provided to the world that even remotely jeopardizes national security."

Greenwald warned that we haven't seen anything yet, compared to what The Guardian has coming. So will whistle-blower and patriot Edward Snowden wind up in some secretive star court and gulag the way Bradley Manning has? Probably-- and, sadly, with the blessing of most Americans. Or maybe Iceland will give him asylum.

When WikiLeaks burst onto the international stage in 2010, the small Nordic nation of Iceland offered it a safe haven. Now American whistleblower Edward Snowden may be seeking that country’s protection, and at least one member of its parliament says she’s ready to help. On Sunday evening Icelandic member of parliament Birgitta Jonsdottir and Smari McCarthy, executive director of the Icelandic Modern Media Initiative, issued a statement of support for Snowden, the Booz Allen Hamilton staffer who identified himself to The Guardian newspaper as the source of a series of top secret documents outlining the NSA’s massive surveillance of foreigners and Americans.

“Whereas IMMI is based in Iceland, and has worked on protections of privacy, furtherance of government transparency, and the protection of whistleblowers, we feel it is our duty to offer to assist and advise Mr. Snowden to the greatest of our ability,” their statement reads. “We are already working on detailing the legal protocols required to apply for asylum, and will over the course of the week be seeking a meeting with the newly appointed interior minister of Iceland, Mrs. Hanna Birna Kristjánsdóttir, to discuss whether an asylum request can be processed in a swift manner, should such an application be made.”

It’s not yet clear whether Snowden has officially applied for asylum in Iceland. A press contact for the Icelandic Ministry of Interior, which handles asylum requests, said that he hadn’t yet seen an application from Snowden and that the ministry couldn’t comment until one was received.

Snowden, who left his home in Hawaii in May and is taking refuge in a Hong Kong hotel, noted his interest in seeking asylum in Iceland in The Guardian’s interview, telling the newspaper that his ”predisposition is to seek asylum in a country with shared values, The nation that most encompasses this is Iceland,” he said. “They stood up for people over internet freedom.”

The 29-year-old intelligence analyst may have been referring to the Icelandic Modern Media Initiative, a group founded by Jonsdottir and McCarthy that has sought to strengthen Iceland’s protections for media outlets and whistleblowers. That project, which successfully passed a new source protection law in 2011, was propelled in part by Jonsdottir and McCarthy’s participation in WikiLeaks; Both Icelanders helped to publish the leaked Apache helicopter video that revealed the killing of civilians and journalists in Baghdad in April 2010.

“Over the last few days we at the International Modern Media Institute have watched alongside the rest of the world as the US government’s enormous encroachments on privacy and information security have been exposed in the media,” Jonsdottir’s and McCarthy’s statement reads. “These exposures have verified our greatest fears about the state of global intelligence gathering, and yet again highlighted the need for strong privacy protections and government transparency.”

Fly in the ointment: the most recent election in Iceland turned power over to a conservative government not all that likely to be as sympathetic to Snowden as anyone hopes-- if he can even get there, which sounds like a longshot to me considering where he is now.

From The Kingdom Of The Two Sicilies To Iceland

A couple weeks ago David Frum was in Naples and tweeting away how it was what we all have been taught to believe are the "industrious" Northerners who robbed the southern Italians of their glorious past as the economic powerhouse of the region. There were a whole spate of tweets spread of a couple days like this one:


And I just found a solid post he did about it at the Daily Beast, one that challenges the northern European racial stereotypes of southern Europeans as "lazy" and "shiftless"-- and, of course, blaming the eurozone's economic troubles on them (and the southern Irish?). He took issue with a British article, All the bail-out systems under the sun cannot make the eurozone work largely because of its racist suppositions, which he points out as false-- as anyone aware of the history of the Kingdom of the Two Sicilies, the largest and wealthiest Italian state before unification, would know, not to mention the era of Spanish domination of Europe... and beyond. "Yet even continued gifts under some sort of fiscal union," posits the Telegraph "would not bring prosperity, as we see clearly in Italy. Italian unification in 1861 married the Germanic north with the Latin south. The consequent misalignment continues to this day."

Notice how in this story, the northern half of Italy gets temporary promotion to honorary Aryan status-- to be retracted, of course, if and when Italy as a whole must be compared to Germany. (It's never clear why Germany does not get the same treatment in comparison to the even more northerly Denmark-- or why the fair-skinned Irish should exhibit the same economic behavior as the lesser breeds around the Mediterranean.)

It is true that Italian unification has important lessons for all Europe, but not those the Telegraph writer thinks. At the time of unification, Naples was leading Italy's way to industrialization. The North was comparatively laggard. Unification changed all that, by enabling the conquering North to impose its preferred monetary and trade policies on the whole peninsula. (David Gilmour's The Pursuit of Italy is especially lucid on this point.)

Now we are seeing the same pattern recur continent-wide. The key thing to understand about the Euro is that it presented Germany with a hidden devaluation of the Deutsche Mark and southern Europe with a windfall up-valuation of their local currencies. The Euro incentivized Germany to export more; southern Europe-- plus Ireland-- to borrow and consume more. The present crisis is composed of the after-shocks.

Europe's problems were made by Europeans jointly. The Germans are every bit as much the architects of the impending disaster as the Spaniards and Italians. It's pure demagoguery for German politicians to present their country as a victim of policies that over the post 10 years enabled Germany to overcome its own history of overpaid labor and over-rigid work rules, and-- via a new currency regime-- to muscle aside all other European producers on world export markets. It's excessively credulous for outside observers to accept these claims of German victimhood, and much worse for them to concoct pseudo-ethnic rationalizations for such credulity.

Yes, before the superior "Germanic" Italian unified the peninsula, Naples was the biggest city it Italy and third biggest in Europe. The city had the most theaters and the most music schools. It also had the first railroad in Italy-- and the world's first railroad tunnel-- and built and operated the first steamship in the Mediterranean. Of the 8 states that made up Italy before unification, the Kingdom had over 65% of the currency in circulation. Tell it to the Umberto Bossi, Lega Lombarda or the Northern League; it doesn't fit their narrative.

Every time the German people-- not the Italian ones; the real deal up north-- have had the opportunity to express their opposition to Angela Merkel's pan-European austerity agenda, they have. Her center-right party keeps losing elections. In fact, they're losing in states that have been electing rightist governments going all the way back through Hitler. Germany has profited most handsomely of any nation from the eurozone. They've lent other countries plenty of money to buy German products and Germany industry has come to dominate the continent. Now the collapse of the euro is starting to not just look inevitable but to look to the German people like it's something to strive for, as a poll in Spiegel pointed out this week. Germans don't want any more of Merkel's bailouts, even if it means the breakup of the eurozone-- ad regardless of what austerity measures she can wring out of her hapless victims.

Europe is now in the third year of its sovereign debt crisis and the prospect of a breakup of the single currency no longer seems as farfetched as it once did. But from the perspective of most Germans, the euro crisis is still something that mainly affects other countries, namely Greece, Spain, Portugal, Italy, Ireland and now Cyprus.

But although the German economy has shown itself to be surprisingly robust, with unemployment falling and tax yields rising, Germany will not be able to withstand the negative trend in the euro zone for ever. "The crisis in the euro zone is catching up with the German economy," commented Ferdinand Fichtner, chief economist at the German Institute for Economic Research, earlier this week. Indeed, the institute has just dropped its growth forecast for the German economy for 2013 from 2.4 percent to just under 2 percent.

...On the question of the single currency and its survival, the majority-- 54 percent-- believes that Germany should not continue to fight to save the euro if it has to provide additional billions in aid. A sizeable minority (41 percent) disagrees, however, while 5 percent are undecided.

The survey revealed that this skepticism is shared by Germans of almost all political affiliations. Among respondents who support Angela Merkel's conservative Christian Democratic Union (CDU) and its Bavarian sister party, the Christian Social Union (CSU), 52 percent said it was almost pointless for Germany to continue fighting for the single currency, while 45 percent disagreed. The figures are similar among supporters of the opposition center-left Social Democratic party (54 percent versus 43 percent), which has generally supported Merkel in her efforts to fight the crisis.

The greatest skepticism was found among supporters of the far-left Left Party, 68 percent of whom felt it was pointless to keep fighting to save the euro. The most pro-European tendencies were found in the camp of the environmentalist Green Party. There, 64 percent thought Germany should keep trying to rescue the monetary union.

Is there an alternative to Austerity? Of course. It's called growth and it's what's been happening in Iceland, the little country far to the north of Lombardy, Piedmont and Deutschland.

For a country that four years ago plunged into a financial abyss so deep it all but shut down overnight, Iceland seems to be doing surprisingly well.

It has repaid, early, many of the international loans that kept it afloat. Unemployment is hovering around 6 percent, and falling. And while much of Europe is struggling to pull itself out of the recessionary swamp, Iceland’s economy is expected to grow by 2.8 percent this year.

“Everything has turned around,” said Adalheidur Hedinsdottir, who owns and runs the coffee chain Kaffitar, the Starbucks of Iceland, and has plans to open a new cafe and start a bakery business. “When we told the bank we wanted to make a new company, they said, ‘Do you want to borrow money?’ ” she went on. “We haven’t been hearing that for a while.”

Analysts attribute the surprising turn of events to a combination of fortuitous decisions and good luck, and caution that the lessons of Iceland’s turnaround are not readily applicable to the larger and more complex economies of Europe.

But during the crisis, the country did many things different from its European counterparts. It let its three largest banks fail, instead of bailing them out. It ensured that domestic depositors got their money back and gave debt relief to struggling homeowners and to businesses facing bankruptcy.

...Icelanders said that they had stopped feeling ashamed and isolated, the way that they did during the worst of the crisis, when their country was portrayed as a greedy and foolish pariah state and its British assets were frozen by the British government using the blunt and humiliating instrument of antiterror legislation.

“We went through this complicated and terrible experience and were in the center of world events,” said Kristrun Heimisdottir, a lecturer in law and jurisprudence at the University of Akureyri in northern Iceland.

She compared Iceland’s shame to that of a private person thrust onto the front pages by a lurid scandal. “It might take 20 years to recover from the stress and humiliation of having their personal life paraded before the world,” she said. “But it turned out that what happened to us was a microcosm of the whole crisis.”

Some Icelanders say they have been soothed, too, by the country’s bold decision to initiate an extensive criminal investigation into the financial debacle. Many members of the old banking elite have been identified as possible suspects, and some of their cases are beginning to come to trial; several people were convicted of financial crimes last month.

Jailing banksters is certainly the best way to start healing any society that has been ravaged by them. The U.S. and Europe haven't even begun to learn that yet. There'll be plenty of more ravaging to come.

Jim DeMint, Tea Party Be Damned, Can't Recognize That Jamie Dimon Is A Dangerous Part Of A Parasitic Elite America Needs To Be Protected From

Even Rand Paul (R-KY) thought self-styled chief Senate teabagger Jim DeMint (R-SC) was a little offbase with his snivelling suggestion that JPMorgan CEO Jamie Dimon should "guide" Congress when it writes banking regulations. "Probably not the best thing in the world," offered Paul dryly. I might add that though it doesn't measure up to the massive bribes taken by other friends of Dimon like John McCain ($36,531,885), John Kerry ($20,045,202), Chuck Schumer ($18,760,091), Joe Lieberman ($10,967,241) and Miss McConnell ($6,887,747), DeMint has accepted $2,925,367 in bribes from the banksters over the overly long course of his career as a federal lawmaker. The only senator on the Banking Committee with the guts to stand up to Dimon today was Oregon progressive Jeff Merkley. But just before Dimon got sworn in to testify in front of the committee, Bernie Sanders (I-VT) released the detailed findings on Dimon and other Fed board members whose banks and businesses benefited from Fed actions. Over $4 trillion in near zero-interest Federal Reserve loans and other financial assistance went to the banks and businesses of at least 18 current and former Federal Reserve regional bank directors in the aftermath of the 2008 financial collapse. "This [GAO] report reveals the inherent conflicts of interest that exist at the Federal Reserve. At a time when small businesses could not get affordable loans to create jobs, the Fed was providing trillions in secret loans to some of the largest banks and corporations in America that were well represented on the boards of the Federal Reserve Banks. These conflicts must end," Sanders said. I guess that's why Elizabeth Warren has been demanding that Dimon resign from the board of the Fed.

Tea party favorite Sen. Jim DeMint (R-SC) on Wednesday asked JPMorgan CEO Jamie Dimon, who recently announced that his company had lost at least $2 billion in the derivative market, to “guide” Congress in creating friendly banking regulations.

I'm certain it's just a coincidence, but today, over at Tyler Durden's place, just when Dimon was celebrating a reunion with some of the many senators he's bought up, economist Charles Hugh Smith was offering his insights into parasitic elites and their ability to persuade Congress to allow them to not pay any taxes. He answered the question, "Do the Parasitic Elite Pay Any Taxes?"

The parasitic financial Elite don't do any "work" in the sense of something beneficial for society, as no voluntary payment for their services exists.

If a parasite's entire income is leeched from the productive, then isn't their entire income a tax on those creating value? In this sense, the share of the parasite's income which is carved off by the Central State as tax revenues is a secondary tax: the parasite's entire income is a tax on the economy.

This distinction between legitimate wealth derived from value creation (think Steve Jobs/computer industry) and parasitic wealth skimmed from the productive (think Mitt Romney/investment banker) is the heart of Correspondent James B.'s insightful inquiry into the question: can the parasitic Elite be said to pay taxes at all, given that their income is itself a tax on legitimate wealth creation?

...If we understand the difference between parasitic wealth and real value/wealth creation, we can properly align the tax structure to reality: the tax on authentic wealth creation should be low, to encourage wealth creation and the employment (broad-based wealth creation) generated by legitimate value creation.

We must also understand that the Central State now protects and enables parasitic skimming as the primary function of the nation's financial system. Thus the entire financial system is parasitic on the wealth of the nation.

Financial parasitic incomes should be taxed at 99%. If Mitt Romney reshuffles assets created by others and skims $100 million, 99% of that parasitic wealth should be returned to the nation via taxes. The parasite still gets to keep $1 million, more than enough to live well but not enough to buy the presidency, the Congress and the regulatory machinery of the Central State.

All those who claim the Mitt Romney/investment bankers are "creating wealth" are either terribly confused about value creation and capitalism, or they are lackeys/ apologists of the parasitic Elite.

Iceland, you'll recall, defaulted on the kinds of bankster interest payments that are causing so much pain and suffering among real people in Greece, Spain, Portugal, Wisconsin, Ireland, Britain and other countries that are allowing the German and Wall Street Austerity agenda to destroy the middle class and drive teh working poor into destitution. And Iceland threw some of those banksters-- and the politicians that enabled them-- into prison. How's that working out for them? Really well, as a matter of fact. It's not quite the second anniversary of this column by Paul Krugman and he's trumpetting the astounding success they've had by telling the Germans to shove their Austerity where the sun don't shine.

Iceland is, of course, one of the great economic disaster stories of all time. An economy that produced a decent standard of living for its people was in effect hijacked by a combination of free-market ideology and crony capitalism; one of the papers (pdf) at the conference I just attended in Luxembourg shows that the benefits of the financial bubble went overwhelmingly to a small minority at the top of the income distribution.

And in the process of building short-lived financial empires, a handful of operators built up enormous debts that their fellow citizens are now expected to repay.

But there’s an odd coda to the story. Unlike other disaster economies around the European periphery-- economies that are trying to rehabilitate themselves through austerity and deflation-- Iceland built up so much debt and found itself in such dire straits that orthodoxy was out of the question. Instead, Iceland devalued its currency massively and imposed capital controls.

And a strange thing has happened: although Iceland is generally considered to have experienced the worst financial crisis in history, its punishment has actually been substantially less than that of other nations.

...The moral of the story seems to be that if you’re going to have a crisis, it’s better to have a really, really bad one. Otherwise, you’ll end up taking the advice of people who assure you that even more suffering will cure what ails you.

Yesterday he was writing that although "GDP is still below previous peak... I think one could argue, much more so than in say America, that a significant part of that peak involved a Ponzi financial sector that isn’t coming back [and]... Iceland’s heterodoxy was yielding a surprisingly not-so-terrible post-crisis outcome."


UPDATE: Bernie Sanders



Would you like to help make sure Bernie gets back into the Senate? At least he recognizes that Wall Street regulates Congress instead of Congress regulating Wall Street. Here's where you can help Bernie be reelected.

Germany Has Virtually Taken Over Greece & Italy-- Portugal, Spain & Ireland Are On The Rocks, So How Has Iceland Escaped Their Fate?

Greece is now the Sick Man of Europe-- and Turkey, thriving, has the right to be as happy as it is that they were never accepted into the Eurozone. And Spain, with its far right Austerity-über-alles new government, could well be the next economic catastrophe, a way bigger one than Greece. The debate, in fact, seems to be when Spain, with soaring unemployment and deepening recession, unwinds, not if. Meanwhile, though, the little island in the middle of nowhere, barely part of Europe at all, is recovering.

After the same axis of bankster-and-politician greed that wrecked the economies of the U.S. and Europe, devastated Iceland, the people took a more proactive policy than anywhere else, arresting politicians and banksters, putting them on trial, and nationalizing the criminal banking operations. Now those operations-- without the criminal banksters-- are coming back to life... while the U.S. and Europe are still being held captive by the same evil axis-- yes, even under Obama-- that caused such havoc and economic dislocation. Iceland learned the hard way what happens when the banksters dictate deregulation to bought-and-paid-for political hacks. And they let their banks collapse and default. "Today, Iceland is not only the first country to put its political leader on trial for the crisis but it also offers a test of the advantages of indebted nations simply letting their banks collapse and default on their loans... Some say it is the trial of the bankers, which began a few weeks ago, that will help Iceland shake off the demons of its financial crisis." Around 100 banksters and politicians will face trial. Meanwhile, unlike Europe, the country is well on the way to recovery.

Iceland’s banking sector is slowly beginning to emerge from the shadow of the 2008 bank crash that plunged the country’s economy into crisis, say senior industry figures.

New Landsbanki, one of the government-backed banks created after the collapse of Iceland’s financial sector, is likely to float on the stock exchange as early as next year, according to its chief executive Steinthór Pálsson.

The two other main new banks in Iceland-- Arion Bank and Íslandsbanki-- could also be sold to private investors as early as next year, according to their chief executives, in what will be a significant milestone on the path to the recovery of Iceland’s financial sector.

“There is still a long tough road ahead of us but we are beginning to return to something like normal,” says Mr Pálsson, at Landsbanki’s main branch in central Reykjavik. “We will most likely be listed next year and the government will start to gradually reduce its stake in the bank,” he adds.

All three new banks were created with the help of the government in 2008 to house the rescued domestic assets of the failed banks Kaupthing, Glitnir and Landsbanki. They are owned by the government and the creditors of the old banks.

The news of the new bank’s impending sale follows a largely positive assessment of the Icelandic banking sector in recent months by Fitch, the rating agency, and the International Monetary Fund, which both agreed that the sector is on much firmer footing than a year ago.

...The eventual sale of the three main banks, which the old creditors agreed would happen by 2014 at the very latest, will be a landmark moment in the torrid history of the Icelandic banking sector.

The bloated industry, which had assets 10 times the size of Iceland’s gross domestic product before the crisis, collapsed in 2008 bringing the country’s currency, government and much of the economy down with it. The island nation of 320,000 was forced to accept $10bn in loans from the IMF and others.

The success over the coming years of these new banks, which are one-fifth of their pre-crisis size and almost entirely domestically focused, will be crucial to Iceland’s burgeoning economic recovery. “We need successful banks to make this recovery work,” says Steingrímur Sigfússon, minister for economic affairs.

Regulators say the key challenge for the sector is the large number of non-performing loans and repossessed assets still on its books. About 70 per cent of corporate loans were foreign-exchange linked in 2007 and so the sharp fall in the value of the krona made many loans near-unpayable. Despite significant restructuring efforts, close to one quarter of the loans are non performing.

...Mr Pálsson says that even the Icelandic peoples’ frosty attitude to bankers has been starting to thaw. “Two years back it could be tough for our employees to be at a family gathering because people were complaining about the banks constantly,” he says. “Now the situation has changed and our employees can go to family gatherings without problems.”

Iceland is now debating whether or not to join the Eurozone. The Parliament seems about evenly split and it would have to go to a referendum, a referendum probably destined to fail.