Hermann Guðmundson, CEO of N1 (formarly Esso oil), said at an open association meeting of the Federation of General and Special Workers held at Grand hotel this morning that a lot of measures could have been taken to avoid the collapse of the Icelandic banks. The collapse had in fact started in March when the exchange rate of the króna had plummeted and short sellers had been seen at 101 Reykjavik hotel. At the time the Prime Minister had said that we had reached bottom that is the time that the government should have gone to the IMF, to keep the Icelandic banks alive. ‘The government neglected their duty’ says Mr. Guðmundson and made a few suggestions that he wants implemented right away.
Mr. Guðmundsson said administrators are contemplating their liability when companies are hanging by a thread and are kept running with considerable negative capitol position. Those companies were apt to default on, among other things, public dues. The administrators of those firms do not wish to be called criminals and to prevent that they will be put in jail the government would have to change legislations. Mr. Guðmundson also suggested that the government founded a trust to lend companies for as long as 5-10 years, companies’ debts will have to be redefined and property tax on vacant properties should be lifted and the government should buy real estates from contractors. Also it should be seen to that competition authorities were able to make their rulings with swiftness.
Mr. Guðmundsson also said that companies should be able to reduce employees to part time work rather than lay them off. Unfortunately mass lay offs were inevitable, and N1 one had downsized their workforce by 10% since this summer and laid off 70 people. He also said that more and more companies were defaulting every day. He named N1 as an example they have 16 thousand account holders doing business. A year ago 100-130 bills were in debt collection because of defaults, now they are well over one thousand.
‘Our costumers lack off liquid assets is high, contractors big and small are filing bankruptcy and the turn of events has begun which will lead to massive lay offs if nothing will be done’
Other speakers at the meeting were Vilhjálmur Egilsson, CEO of SA (Confederation of Icelandic Employers) and Þór Sigfússon president of SA. Mr. Egilsson restated his earlier opinion that it was necessary to negotiate with foreign lenders of Icelandic companies and institutions and invite them to become shareholders in the new banks. At the same time it is imperative to implement IMF’s plan of action, no sooner would the currency market start again. At the current situation ongoing access to international finance markets is essential. Mr. Egilsson also said that if that did not succeed, Iceland would be faced with paying up all claims that have been made, we will be heading into mass-bankruptcies of companies and individuals.
‘Even if they are dogs’
In both Mr. Egilssons and Mr. Sigfússons cases there was a very distinct criticism on the authorities for not showing enough cooperation with the working forces. It is necessary to know where we are heading and Mr. Egilsson suggested that discussions on switching to € and membership to the EU be started. Mr. Sigfússon said that the business classes will not survive through many more days without any solutions, a broad sense of solidarity was needed and cooperation from the authorities. With that many of the uncertainties will be lifted. ‘The government has not sought much cooperation from us, the playing style of holding their cards close is unfortunate. It would be better to reveal your cards, even if they are mere dogs’ says Mr. Egilsson.
(Note from translator – Dog is a bridge term; meaning a bad hand)
News article by Björn
Original article in Icelandic