From Iceland — Debt Relief Press Conference -- Live Blog

Debt Relief Press Conference — Live Blog

Published November 10, 2014

    Before: Press conference should start at 13.30 local time. Live broadcast here. We’re gonna follow the events – you’ll see what follows appear below, in reverse order, that is newest posts will be on top. This is all very lo-fi, so please hit the refresh button for updates.

    After: The press conference is evidently over. It was somewhat shorter than expected, a veritable rollercoaster ride through various numbers. One point is clear: the government intends to implement the measures faster than originally planned. This was explained as sensible to save costs on interest rates. Another point that is also quite clear is that members of the government are eager to emphasize that loads of people will benefit from the measures for decades to come. What has been clear for a while, and remains clear, is that the operation, introduced as “Leidrettingin” or “The Correction” will be financed by the state budget. The implementation of a special bank tax, mentioned as a likely method to support the project, was not explained in any detail. Meanwhile, according to Vísir, numbers of people criticized the implementation on twitter and facebook, during the conference. Presumably, pros and cons of the arrangement will be examined throughout this week, at the very least. For a very short introduction to the debt relief plan’s history, see here. So far, no medium seems to have reported the name of the economist who handled most of the conference. Our investigative team will find that out as soon as humanly possible. The name of the economist who delivered most of the introduction is: Halldór Benjamín Þorbergsson. Stay tuned!

    To conclude the broadcast on our part: One of the final slides, the economist’s summary. Five points, emphasizing: lots of households, lots of money.


    This is finished, Guðrún Ögmundsdóttir just said. Now the ministers will be interviewed. That must mean this was the economist speaking. We will find his name and report it, for sure (update, found: Halldór Benjamín Þorbergsson). Later on. If anyone stayed with us here, thank you for your endurance, not to mention stability, during this, our rather chaotic first attempt at a press conference live blog.

    To conclude, he adds: The average correction is 1,35 mi ISK. Thank you.

    To summarize, he says: this is a general operation directly affecting 90,000 individuals and more. Stability and lower inflation. Money, money, money. Again: 4,000 people who owe more than they own will own more than they owe.

    12,000 ISK monthly savings for 9 years and 9 months would be needed to save up the 1.8 million (or 1.4? The slide left early) reduced in one example. Isn’t that a pretty sad fact about money in general? The date he would have saved that million point something is in august 2024.

    More slides. Lots of graphs.

    Money in hand will increase by 17% until 2017, for those participating. Ráðstöfunartekjur – what’s the economic term for money to spend?

    He says some people who took a real estate loan for 15 million will only pay 13 million back. Others will pay 20 million less than they would without this operation. Even if the roof-limit on the amount provided by the state is 4 million ISK. Making full use of the operation is a phrase they use a lot for those who also use their private savings to pay down the loans, according to a system not fully explained yet. Or corrected, if my understanding is wrong.

    The guy on stage, whose name I still have not figured out, emphasized, as Sigmundur David did earlier, that the positive effects of the “correction” will be felt for decades. Had a graph to prove it, but I missed that one. They come and go pretty fast.

    Two graphs showing effect on a particular loan, taken as example and its monthly payments:



    More examples like this provided, with different dates.

    The man seems pretty good at presenting material, but he could do with some comic relief. These numbers make drowsy.

    The debt reduction – niðurfærslan – depends to a large extent on the age of the loans involved, he says.

    55% of the amount goes to individuals who own 4 million ISK or less in their real estate and couples who own 13 million or less, he says. Some of the information provided sounds repetetive, but I can’t always tell instantaneously what’s new and what isn’t.

    Info. This thing is about the age distribution. 68% of the total amount goes to people who were under 50 in 2008. I think that is what he said. Is that informative?


    Here is the graph with the yellow column. Yellow means accepted here, it seems. Yellow for go.

    guy 4

    guy 3

    40 billion will be provided, from public funds, this year, then 20 next year and 20 more in 2016, totalling at the before-mentioned 80.

    People can start applying tomorrow. They seem to like that fact a lot. And then verify and finalize the deal mid-December.

    Says: news that 15,000 individuals were rejected is not correct. Those cases are still being processed. They will be added to the yellow column, in a graph I will show momentarily.

    guy 2

    All … inflation between 2008 and 2009, in excess of 4%, is cancelled with this operation, he says.

    This can be done with the 100 billion ISK from the government.

    Then he mentions 70, 80 and 150 billions as well. I’m not sure where the 100 came from, but they fit in there somewhere. All in all, the operation will cost 150 billions, 80 as direct payments from public funds, 70 as tax discounts. I think. There’s a lot of numbers and graphs flying around right now. Update: 100 bi ISK is reportedly the total amount provided to the operation through the state budget, and the amount by which principals will be lowered in total, through direct loan relief on the one hand and tax reductions on the other. Still not clear how the amount overlaps with the 70, 80 and 150 mentioned above.


    He says there are reasons of fairness, justice, economics and equality behind the operation. On picture above along with some pretty impressive information.

    A man walks on stage. Who is he? (Update: Economist Halldór Benjamín Þorbergsson) My network connection broke for a second, but he looks like he knows what he is saying. Or really likes to act as if he does, in any case.

    The correction is a “general operation” he says, not a specific or particularist one.


    It has been a pleasurable surprise how many people applied, said B. Almost 100% of those who had the right to apply for debt relief did.

    Adds: people will decrease their debt by 20%, if the also take that other solution they offer, for which I have no English term at the moment. 2500 households will move from a negative situation to a positive one, in terms of finally owning more than they owe, after the operation. (Also lack the English term for this, sorry.)

    B then thanks all those who took part in the development of this operation.


    Household debts increased drastically in the crash, B says. Up to 120% of GDP. Now we will go below 100%. Drastic change in a short time.


    Now Bjarni Ben, Mininster of finance gets the word. They could lower the interest costs by doing things faster than the originally intended, he says.

    S said something about the operation correcting every increase of debts exceeding the development of the consumption index since 2008. This is an act of justice, he said. Thousands of households will feel the positive effects for decades.

    S says: thanks for coming. This went even better than we thought a year ago. As in: people get more money, it seems.


    Sigmundur is there!

    Video: soothing voice. Irritating music. Cursor clicking around. First example taken: one individual with two real estate loans. Gets 2.4 million ISK discount. If you think the calculation is wrong, once you apply, you can file a complaint. If you’re happy with the thing, you sign with electronic ID. Or a mobile phone, it seems.

    This was a complex thing, they said, but they tried to make it as simple as possible. Goal: to get the thing done before the end of this year. The ministers will speak, she says. Then an economist. First, the video. Probably the one we linked to below. This one.

    They’re here, and say: welcome! Guðrún Ögmundsdóttir first on stage, chair of the committee responsible for the implementation.

    While we wait, Vísir has screened video instructions, published to instruct people how they find out “how much authorities will move your loan downwards”, for a verbatim translation. Here.

    It’s 2 minutes past here, and RÚV still just plays soothing music over a black screen.

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