flickering pictures

According to the U.K., that there is a map of the world’s newest terrorist state.

As stock markets continue to dry-heave at the toilet of the world economy — and as financial-sector CEOs continue to dry-hump the American taxpayer — we’re discovering that British municipalities, police forces and other investors had a lot of money in Iceland’s high-interest banking system. Now that those banks have gone belly up, British prime minister Gordon Brown is demanding that Iceland’s government compensate the unhappy Brits — and he’s using the extraordinary powers granted under the U.K.’s anti-terrorism laws to freeze Icelandic assets in British banks until it does.

I might be crazy, but aren’t anti-terrorism laws meant to be used against, you know, terrorists?

As opposed to Iceland?

From the Guardian:

With no sign of Iceland being able to repay the money and councils lobbying ministers for reassurance that the cash would be recovered, Britain went on the offensive. “What happened in Iceland is completely unacceptable,” said Brown. “I’ve spoken to the Icelandic prime minister, I have told him this is effectively an illegal action that they have taken. We are freezing the assets of Icelandic companies in the UK where we can. We will take further action against the Icelandic authorities where necessary to recover the money.

[…] Geir Haarde, Iceland’s prime minister, said he was surprised by Brown’s remarks, and urged him to consider resolving the issue in the courts. The Treasury said it had no imminent plan for a wider move against Icelandic companies operating in the UK saying the only action taken so far was the freezing of the Landsbanki’s estimated £7bn of UK assets.

Asked if the financial crisis engulfing Iceland had become a diplomatic crisis with Britain, Haarde added: “I thought so for a few minutes this morning when I realised that a terrorist law was being applied against us. That was not very pleasant. I’m afraid not many governments would have taken that very kindly, to be put into that category.”

Brown says he was forced to use the “Anti-Terrorism Crime and Security Act 2001″ because the lost British funds had to be recovered “in the most effective way possible.” What he really meant was that there’s no legal justification for freezing Icelandic assets, and that he essentially had to call Iceland a terrorist state in order to do so.

There are lots of reasons Iceland can’t pay. First off, its currency just lost half its value, and its entire banking sector is collapsing on a scale far greater than anything seen in the U.S. so far. It doesn’t help either that its entire population includes just 313,000 people — 2,000 more than the town of Aurora, Colorado.

But none of that is the issue — the real problem here is that the U.K. is bullying a neighbour with one of the most flagrant abuses of anti-terrorism legislation that the post-9/11 Western world has so far seen. If Brown can invoke terrorism laws and assume extraordinary powers just to settle a banking dispute with a friendly democratic nation, he can use it for anything at all.

Image via Holt, Rinehart and Winston.

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