In 1972, Iceland was the stage for one of the more dramatic encounters of the Cold War.

This time it was over a chessboard.

The tempermental American genius Bobby Fischer was up against the reigning World Chess Champion Boris Spassky, a Russian.

Both players felt the pressure and accusations flowed from Russia to America and back again that the other side were trying to subvert their opposing player.

Finally, once Fischer settled his fee and actually made his mind up to play chess, the American triumphed over the Russian.

Then the reclusive American declined to defend his trophy and the Russians under Anatoly Karpov once again assumed the title in 1975.

Fischer, once the beloved darling of America, was a troubled soul. He praised the September 11th attacks on America saying the U.S. should be ‘wiped out’. Apart from a 1992 rematch against Spassky – which he won, although both players were well past their best – he had retired from Chess. He died early this year.

Iceland, situated at the edge of Europe, has often been the site of such American – Russian meetings. It has often acted as a bridge between the two nations.

It is, however, a founder member of NATO.

So it must cause America some alarm when Iceland has now turned to Russia for a 4 billion euro loan.

It cites lack of help from its NATO allies when dealing with its banking problems in the global credit crunch. I have cited before the help that Norway gave Iceland; it seems its other NATO allies weren’t quite as generous.

“We have not received the kind of support that we were requesting from our friends,” said prime minister Geir Haarde. “So in a situation like that, one has to look for new friends.”

Although Iceland has said that they have not made any military concessions yet to the Russians, it must be a concern to NATO. Iceland’s position in the North Atlantic is vital for allowing movement between the U.S. and Europe, the so-called GIUK gap (Greenland-Iceland-UK). If Iceland was to allow any Russian bases on its soil, that would seriously compromise NATO.

Its the makings of another political chess match.

Coincidentally, today was the start of the 2008 World Chess Championship between Viswanathan Anand, the current World Champion from India, and Vladimir Kramnik, the previous champion from Russia and the man who took the title from Garry Kasparov. (Kramnik had also beaten Bulgarian Veselin Topalov, the FIDE champion and his win unified the chess crown and brought FIDE to prominence again.)

Today’s game was drawn, something that favours Anand as Black.

Kramnik,V (2772) – Anand,V (2783) [D14]
WCh Bonn GER (1), 14.10.2008
1.d4 d5 2.c4 c6 3.Nc3 Nf6 4.cxd5 cxd5 5.Bf4 Nc6 6.e3 Bf5 7.Nf3 e6 8.Qb3 Bb4 9.Bb5 0-0 10.Bxc6 Bxc3+ 11.Qxc3 Rc8 12.Ne5 Ng4 13.Nxg4 Bxg4 14.Qb4 Rxc6 15.Qxb7 Qc8 16.Qxc8 Rfxc8 17.0-0 a5 18.f3 Bf5 19.Rfe1 Bg6 20.b3 f6 21.e4 dxe4 22.fxe4 Rd8 23.Rad1 Rc2 24.e5 fxe5 25.Bxe5 Rxa2 26.Ra1 Rxa1 27.Rxa1 Rd5 28.Rc1 Rd7 29.Rc5 Ra7 30.Rc7 Rxc7 31.Bxc7 Bc2 32.Bxa5 Bxb3 draw.

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Newspapers have been quoting the survey by the World Economic Forum in which business leaders have been rating the solvency of world banks.

The rankings however were compiled just before the recent £50 billion bail-out by the UK, the nationalisation of the Icelandic banks and the larger US bail-out.

The website has the co-authors interviewed from the 3rd to the 7th of October. The report itself was published on the 8th October.

RANKINGS

1. Canada

2. Sweden

3. Luxembourg

4. Australia

5. Denmark

6. Netherlands

7. Belgium

8. New Zealand

9. Ireland

10. Malta

11. Hong Kong

12. Finland

13. Singapore

14. Norway

15. South Africa

16. Switzerland

17. Namibia

18. Chile

19. France

20. Spain

21. Barbados

22. Bahrain

23. Slovak Republic

24. Brazil

25. Estonia

26. Austria

27. Panama

28. Mauritius

29. Kuwait

30. Qatar

31. United Arab Emirates

32. Trinidad and Tobago

33. Senegal

34. Israel

35. Portugal

36. Iceland

37. Cyprus

38. Botswana

39. Germany

40. United States

41. Lithuania

42. Peru

43. El Salvador

44. United Kingdom

45. Greece

46. Benin

47. Costa Rica

48. Malawi

49. Guyana

50. Malaysia

51. India

52. Puerto Rico

53. The Gambia

54. Montenegro

55. Mexico

56. Croatia

57. Czech Republic

58. Jordan

59. Ghana

60. Suriname

61. Brunei Darussalam

62. Latvia

63. Saudi Arabia

64. Kenya

65. Jamaica

66. Honduras

67. Zambia

68. Burkina Faso

69. Slovenia

70. Sri Lanka

71. Pakistan

72. Philippines

73. Republic of Korea

74. Romania

75. Thailand

76. Madagascar

77. Colombia

78. Cote d’Ivoire

79. Italy

80. Bulgaria

81. Hungary

82. Cameroon

83. Georgia

84. Oman

85. Tunisia

86. Paraguay

87. Nigeria

88. Armenia

89. Morocco

90. Dominican Republic

91. Bolivia

92. Malia

93. Japan

94. Tanzania

95. Moldova

96. Bosnia and Herzegovina

97. Poland

98. Nicaragua

99. Venezuela

100. Uruguay

101. Guatemala

102. FYR Macedonia

103. Syria

104. Albania

105. Nepal

106. Mozambique

107. Russian Federation

108. China

109. Uganda

110. Serbia

111. Egypt

112. Ukraine

113. Vietnam

114. Turkey

115. Bangladesh

116. Azerbaijan

117. Taiwan, China

118. Ecuador

119. Mauritania

120. Mongolia

121. Indonesia

122. Zimbabwe

123. Tajikistan

124. Kazakhstan

125. Cambodia

126. Burundi

127. Chad

128. Ethiopia

129. Argentina

130. East Timor

131. Kyrgyz Republic

132. Lesotho

133. Libya

134. Algeria

Yes. That’s right.

The UK lies behind Peru and El Salvador.

Now given this report was a survey of the world’s economists whose advice our banks were no doubt taking; should we believe it?

Are the UK’s banks really behind Peru, El Salvador and Senegal?

Or is it an accurate representation that is slightly out of date, compiled as it was slightly before the bail-outs?

That must depend on whether you believe the bail-outs will work.

If reports are to be believed the Royal Bank of Scotland is next in line to be nationalised tomorrow. If that happens then there will be further pressure on the remaining UK bank’s to be nationalised too. The banking sector could be picked off one by one by the market and the taxpayer forced to pick up the tab.

On that Iain Dale post there have already been comments about the English taxpayer bailing out the Scottish bank.

It must be a pity, to all those who carp, that Scotland is not already independent.

An independent Scotland with a similar oil fund like our neighbour Norway could be similarly insulated from these turbulent times.

It would also have the economic levers to maintain its economy best, not just for the South-East of England as remains the case today. Remember Eddie George, the former Governor of the Bank of England: Unemployment in the north is a price worth paying for affluence in the South!

Although the credit crunch is global, take a look back at those rankings.

Sweden, Luxembourg, Denmark, Belgium, Netherlands. All small countries lying in the top 10.

Even Ireland, who have recently guaranteed all deposits in their banks, are sitting 9th.

The argument that Scotland is too small to be financially unstable is farcical! I don’t hear anyone saying that Denmark is too small and should be run from Berlin. (Not since the days of Adolf Hitler and the Second World War anyway!)

As countries large and small struggle with the credit credit crunch from the U.S. and Russia down to Iceland with its 300 000 population, this population argument of independence must be seen to be invalid. Iceland, with a population slightly smaller than North Lanarkshire, isn’t exactly Miramont Gardens in Pimlico!

What matters now is that we take the right decisions to get out this mess.

Those decisions may be different for each country. They may even be different for England, Scotland, Wales and Northern Ireland.

That’s why its important key economic levers are devolved away from Westminster.

Otherwise the Eddie George syndrome will hamper ‘the North’ recovering for years.

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