2008. The main bank of the country is nationalized. The Krona, the currency of Iceland devaluates and the stock market stops. The country is in bankruptcy
2008. The citizens protest in front of parliament and manage to get new elections that make the resignation of the prime minister and his whole government. The country is in bad economic situation. A law proposes paying back the debt to Great Britain and Holland through the payment of 3,500 million euros, which will be paid by the people of Iceland monthly during the next 15 years, with a 5.5% interest.
2010. The people go out in the streets and demand a referendum. In January 2010 the president denies the approval and announces a popular meeting. In March the referendum and the denial of payment is voted in by 93%. Meanwhile the government has initiated an investigation to bring to justice those responsible for the crisis, and many high level executives and bankers are arrested. Interpol dictates an order that make all the implicated parties leave the country.
In this crisis an assembly is elected to write a new Constitution… 25 citizens are chosen, with no political affiliation, out of the 522 candidates. For candidacy all that was needed was to be an adult and have the support of 30 people.
So in summary of the Icelandic revolution:
- resignation of the whole government
- nationalization of the bank.
- referendum so that the people can decide over the economic decisions.
- incarcerating those responsible for the Crisis
- the rewriting of the constitution by its people
Have we been informed of this through the media? Has any political programme, radio or TV, commented on this?
No! The Icelandic people have been able to show that there is a way to beat the system and has given a democracy lesson to the world.
Reading this set me on to trying to find out more…
Two Sites Worth Looking At
You’ll find many sites listed; I’ve only had time to flick through these two
I don’t have time to go through all 7,000,000 items that come up when you Google ‘Iceland’s Revolution’. Isn’t this what politicians of all stripes rely on? The ordinary citizen does not ever have time to fish out everything that’s going on in the world—presupposing that such a process would ever be possible. And so they can rely on an emotional response to doctored information leaks to determine ‘democratic’ points of view.
Here’s some bits from the Business Insider’s interview with Ólafur Ragnar Grímsson, (President of Iceland since 1996, …thoughts on Iceland’s recovery, and how a large financial sector can ruin a nation…)
Interviewer: How has life in Iceland changed since the meltdown?
It’s very difficult to give a short description of how life has changed. It’s absolutely clear in Iceland, like many other countries, the financial crisis came as a profound shock, not only to the financial institutions, but also to ordinary people, the economy…
So thousands of Icelanders had to struggle with fundamental change in their economic situation, loss of income, even loss of property, increased burden of loans, unemployment, and the nation as a whole also had to face — which somehow we were fortunate to realize early on—that the collapse of the banks was not just an economic or financial crisis, but also developed into a very profound political, social, and even judicial crisis.
…I think one of the reasons Iceland has come out of this crisis earlier and more effectively than anyone could have expected, even ourselves, is that early on, we approached this not just with economic and financial challenge, but also attempted to deal with the profound profound social, political, and even judicial challenges, which the collapse of the bank brought about.
And during those final months of 2008 and the early weeks of 2009, what we saw here in Iceland was a fundamental threat to the political and social stability of the nation. Iceland is one of the most stable, open, and secure democracies you can find anywhere in the world… if a collapse in the financial sector can bring one of the most stable and secure democracies and political structures to its knees, as happened in Iceland, what could it do in countries that have less stable democratic and political history?
So this journey in the last three years has not only been difficult for ordinary people, families, homes, many companies, but it has also been a profound learning experience for the nation, not just economically, but as I said before, politically and socially as well.
Interviewer: Do you look at Greece and wonder if they should be learning from the Icelandic model?
I have been very hesitant and reluctant to pass judgment on what other countries should do. I saw many misleading judgments made by people in other countries with respect to Iceland in recent years that I don’t think it is wise or fair for me to tell other countries what they should do.
But I think it is our obligation in Iceland to give an open and honest description of our own experience, of the lessons we have leaned, and other people can draw their own conclusions. I have already mentioned that if you want to deal with this economic crisis, you must treat it not only as an economic challenge but also as a fundamental social, political, and even a judicial challenge.
We have, to some extent, gone against the prevailing economic orthodoxies of the American, European, and IMF model in the last 30 years. This has even been recognized by the IMF leadership.
…we said goodbye to the IMF program, and [the meeting] was attended by Paul Krugman, and other prominent economists, as well as some of the leading officials of the IMF. And it was very interesting to hear them acknowledge that the IMF had probably learned more from this experience with Iceland than Iceland had learned from the IMF. It has made the IMF reconsider some of their orthodox stances on what should be the proper economic and financial response to a crisis on this nature.
…we have, in our economic measures, tried to protect the lowest income sectors, we have to try and protect some of the elementary social and health services, and done more of that nature than has traditionally been done in dealing with such a crisis.
As everybody knows now, we did not pump public money into the failed banks. We treated them like private companies that went bankrupt, and we let them fail… Whereas in many other countries, the prevailing orthodoxy is you pump public money into banks and you make taxpayers responsible for the banks in the long run, and somehow treat the banks as if they are holier institutions in the economy than manufacturing companies, commercial companies, IT companies, or whatever.
I have never really understood the argument: why a private bank or financial fund is somehow holier for the well being and future of the economy than the industrial sector, the IT sector, the creative sector, or the manufacturing sector.
So if you add all of this together and throw in the devaluation of the currency as well… the outcome is the Icelandic economy is recovering faster and more effectively than any other economy, including the British and the American that suffered from a big financial crisis in 2008.
…Arguing that private banks should operate in a way that the profits go to them, but the losses go to ordinary people back home is something that needs to be examined.
We have, however, concentrated on our recovery, and paradoxically, what we are seeing in the last two years is that many sectors in Iceland: the energy sector, the tourism sector, the IT sector, the manufacturing sector, and the fishing sector are doing better in the last two years than they did prior to the banking crisis…
When the Icelandic banks collapsed, what we saw was that a great number of companies in the creative sectors, IT, high-tech, and all of those, who had the large growth potential in the previous years, but had not been able to realize it because they couldn’t get the people, due to the fact that the banks were buying up all the best engineers and mathematicians and computer scientists, suddenly had the pool of talent available to them. And within six months, all these people who came out of the banks with these qualifications had been hired. So since then you have seen a great growth period in the Icelandic IT sector, the high-tech sector, the manufacturing sector, because they could suddenly get the engineers, the mathematicians, the computer scientists.
So the lesson from this is: if you want your economy to excel in the 21st century, for the IT, information-based high-tech sectors, a big banking sector, even a very successful banking system, is bad news for your economy. You could even argue based on this that the bigger the banking sector is, the worse is the news for your economy, because their magnetic attraction of taking engineers and technically qualified people and computer scientists into the banking sector is due to high bonuses and higher salaries prevents these creative growth sectors from realizing their full potential.
For UK readers: Could you imagine Clegameron talking as intelligently as this?
Otherwise, just imagine all this being Headline News on Radio, TV and in the Press…
Dream on. The Power Possessors have us in thrall. In the UK the cat is out of the bag—the Tories intend to destroy the Welfare State, to privatise everything from roads to health, to make people pay more for their pension, work longer and get smaller pensions when eventually they might manage to survive to retirement.