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International Lawyer "Speechless" Over Iceland Capital Controls Plan

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International Lawyer "Speechless" Over Iceland Capital Controls Plan

Money - Icelandic Króna

Photo: Páll Kjartansson

Lee Buchheit, a lawyer given the label ‘Crusader for Financially Stricken Countries’ by the Financial Times, is well-known in Iceland.

Buchheit has helped the Icelandic government in several ways, including as an adviser on how to go about removing capital controls.

He says that the so-called ‘stability tax’ of 39 percent that the government plans to impose on investors in the bankrupt banks wishing to take funds out of Iceland will bring in enough revenue to reduce Iceland’s sovereign debt by a third.

In a newspaper interview he says that the reduction in debt will, in turn, serve to save the country ISK 30-40 billion (more than EUR 201.5 million) in interest payments per year.

“One is really just speechless over it all,” Buchheit said in Fréttablaðið. He believes it is unlikely the claimants on the old banks will try to sue over the new tax and that it won’t necessarily serve their interests to repatriate their funds from the Icelandic capital controls.

Buchheit says the end result will be massively improved state finances and a resultant boost in ratings for Iceland by the big credit ratings agencies, DV reported.

“I suspect that ten years from now Harvard Business School might have a research department on Iceland.”

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