Scottish Council's 120m Iceland problem

The global financial crisis of recent weeks is causing a headache for at least one Scottish council. Aberdeen Council has a 120m public private contract involving one of the failed Icelandic banks.

(see also update on Ayrshire Councils money with icelandic banks)

This news emerged as it became clear that 860m of UK public authority money was invested in Icelandic banks. A long list of bodies had monies with the banks - mostly on long term deposit contracts.

The UK governments response has been to use anti-terrorist legislation to freeze Icelandic assets. The government has described actions by the Icelandic government as illegal and unacceptable.

This comes at a time when the Iceandic goverment has been negotiating with Russia for loans to help it with the collapse of banking in Iceland.

In this wider context the problems of a Scottish Council may seem small. But these funds were earmarked for school building programs.

The financial crisis is having impacts internationally, nationally and at local level. This is the nature of things when economies. turn towards recession.

Across the world the crisis will have its impacts on ordinary people., with those who have the least often bearing the heaviest cost.

In all likelihood this crisis will pass in coming months and a year or two of recession will follow.. The impact of this though will be felt in all communities.