Dozens of local authorities in Britain are unable to retreive nearly $1.5 billion in Icelandic bank accounts .
The Icelandic government took over the banks holding the British money las month as the entire country "teetered on the brink of bankruptcy because of the worldwide financial meltdow," according to the Los Angeles Times.
Iceland’s financial problems have been faltering since last spring, and this fall, as the financial crisis deepened, the government took over two of the country’s three largest banks, according to the New York Times.
The problems increased when Iceland realized Britain had used its using its 2001 antiterrorism laws to do the freeze, which appeared to brand Iceland a terrorist state.
The Icelandic prime minister, Geir H. Haarde, responded by accusing Britain of “bullying a small neighbor� and said the action was “very out of proportion.�
Iceland’s key interest rate now stands at 18 percent. The currency, the krona, has declined 44 percent in the last year.
Icelandic foreign minister, Ingibjorg Solrun Gisladottir said Britain’s decision had sent Iceland back some 30 or 40 years.
“This is a major crisis,� she said. “We haven’t been in this situation for, probably, ever. We cannot solve it alone. We need solidarity from partners, from friendly countries, and we thought the U.K. was one of them.�