I handed in a paper yesterday where I examined the correlation between self-image and opinion towards the krona.
The Icelandic krona has been praised by some as the nation’s saviour in some quarters while chastised as a root of many evils in others.
Where you stand on the issue seems to correlate with whether you perceive yourself as nationalistic or international.
Examining the political debate in Iceland, those with a nationalistic self-image are highly likely to view the krona in favourable light, those with a more international self-image were more likely to view it with suspicion and be more open for the adoption of foreign currencies.
So even if economic factors are obviously important, underlying emotional factors also contribute to the policies of the parties.
So is the stability agreement between the government, the unions and the Confederation of Icelandic employers in danger because of an extra 2.000 tons quota of monkfish?
It might be if you listen to Vilhjalmur Egilsson, the chairman of the employers’ confederation. On the radio this morning, he was asked to rationalize how that could possibly be, he avoided any answers but those that voiced concern for overfishing.
So has the confederation become a scientific committee? Or are there larger interests at play?
Isn’t this somehow more of a political move, the radio host asked? The Federation of Icelandic Fishing Vessels Owners is a key member of the confederation. Their websites are even strikingly similar. What the radio host was indicating was that the larger politics at play, dictate that these two organizations are going to do everything possible to rattle the boat for the government.
So it might be true that the monkfish is threatening the stability agreement, but maybe not in the way these two organizations would like people to think. The government might be struggling on many fronts but some things are not being made easier for it.
Someone painted a larger picture this morning. All of a sudden aircraft maintenance engineers and air traffic controllers are striking and upsetting one of the key infrastructure in Iceland, international flight. Why these two groups would chose this time to strike is intriguing. The air traffic controllers are very well paid compared to most Icelanders. And the aircraft engineers have come out to “claim back what they lost in the economic collapse”!!!
Well wouldn’t we all like for that to happen?
Why striking for higher pay right now when just about everyone in society has bigger burdens to bear than before?
Could it be that there are forces at play behind the scenes who want to destabilize things so that certain parties cannot maintain a working government?
During a class on security issues we got to listen to an expert from the city of Reykjavik on the topic of environmental security.
She pointed an interesting folly whereas bauxite is transported from across the world to Iceland where it is smelted to make aluminium. From there it is transported abroad and made into soda cans. People buy the soda cans then throw them away. More bauxite is transported from around the world to Iceland to make more aluminium and therefore we need more aluminium smelters. This was really a vicious circle which contributed to an enormous waste, from single use of recyclable materials to petrol consumption by ships that travel the world to bring raw materials to production.
I offered some advice based on the new laws proposed to outlaw stripping in Iceland. If a government or city council decides that some things are not desirable in society then it can implement laws an guidelines to counter their practice. A few years ago everyone smoked in Icelandic bars and nightclubs. Not anymore, because it was deemed undesirable for the kind of society we want.
I also offered the Singapore chewing gum ban as an example but I think she stopped listening when I said the word stripping.
I explained further that society was obviously conforming to the needs of soft-drink producers in the case of aluminium soda cans. If society can outlaw smoking in bars and stripping, then what is stopping it from cutting down aluminium consumption if it could lessen waste, encourage recycling and minimize the need for more smelters? Selling soda in easily recyclable and biodegradable packaging? A smart soft-drink producer would not waste any time in turning it into great PR for himself, even if the change were forced upon him.
Could it be that it is easier to think of a ban on strip clubs than on soda cans because there are fewer people directly affected? That we take some things for so granted that it is hard to see the possibility for change? Like soda in biodegradable paper containers?
Or could it just be a matter of thinking outside the box…or in this case into the strip club.
PS: Sometimes I just have to think about other things than IceSave, household debts and general corruption. Strip clubs and soda cans are a nice diversion.
PPS: The Waiting for Godot game continues, the congressional report is now due after Easter. Which year is unclear.
I have been to a few radio and television interviews where people are supposed to discuss events and debate their opinions.
Usually I have found people respecting of each others time to state their case and willingness to listen.
Yesterday was the first time though where I have been where the EU membership was one of the topics.
And I understand the nature of the debate so much more now.
Amongst the participants, the chairwoman of Young People Against EU Membership.
First she praised the krona on the same grounds as Steingrimur J. Sigfusson did last week.
When I explained how the fall of the krona destroys assets and home equity she picked up her cell phone to text someone apparently more important.
Then she said that we could so easily adopt the Euro without EU membership.
From then European Bank for Reconstruction and Development Chief Economist Willem Buiter’s 2001 report “Er Ísland Hagkvæmt Myntsvæði?” :
When all things are considered, economic reasons recommend an entry into the European Monetary Union, but not with a one-sided approach. But as Iceland is not a member of the EU, political reasoning goes totally against pretty much any monetary union. Without participation in the EU, it is not politically convincing to endorse parts of Iceland’s sovereignty to the European Central Bank. The institutions who could ensure the liabilities of the Central Bank towards Iceland do not exist and therefore it is unlikely that Iceland would take up the Euro without entering the European Union. Such a move would just simply not be feasible in the long term.
It is true that Iceland could single handedly adopt the Euro but then it would be surrendering its monetary sovereignty to the European Central Bank?
Those who are against the EU on sovereignty grounds, are still prepared to hand over complete monetary sovereignty to the EU without having any say in its operation.
It does not make sense.
But the chairwoman did not seem to be there for a debate or a discussion. When others spoke, she kept texting on her cell-phone.
Are you confused as to why the Independence Party is now topping the polls with 40,3% and adding 11 new members of Althingi if the vote were today?
Don’t be. Voters are illogical, as is evident by this excellent summary from an article in Time. They would even vote for the party which caused the biggest economic downfall worldwide in recent history:
With these acts of legislative sabotage, Republicans tapped into a deep truth about the American people: they hate political squabbling, and they take out their anger on whoever is in charge. So when the Gingrich Republicans carried out a virtual sit-down strike during Clinton’s first two years, the public mood turned nasty. By 1994, trust in government was at an all-time low, which suited the Republicans fine, since their major line of attack against Clinton’s health care plan was that it would empower government. Clintoncare collapsed, Democrats lost Congress, and Republicans learned the secrets of vicious-circle politics: When the parties are polarized, it’s easy to keep anything from getting done. When nothing gets done, people turn against government. When you’re the party out of power and the party that reviles government, you win.
It might have been a politically tactical mistake for the parties on the left to ask for an election in 2009. By taking the helm at this lowest point in Iceland’s history they have put themselves in the firing line, especially the Social Democrats who suffer the biggest damage.
Voters are strange like that. They’d rather blame the fire department than the arsonist if the fire is damaging enough.
And by delaying an IceSave solution, the opposition has cost the country dearly in lost recovery time. But the voters blame the government. That is the nature of the beast. This is fear and confusion at work.
But many of us who agree that this government is a better option than anything with the party which orchestrated the downfall have been really disappointed. Maybe things would be a little bit different if the Social Democratic / Left Green fire department had concentrated on putting out the fires in the bedrooms instead of the wine cellar?
Before the Independence Party has gone through reform and kicked the bad habits that are the fishing lobby and David Oddson’s isolationism, the Independence Party can not be allowed back into government. It would not necessarily be in their best interests to reclaim their seat in government until after the ghosts of the past have been exorcised. When that happens, the Independence Party will have moved significantly towards the spectrum where Social Democrat voters believe their party should be.
The most critical number in the poll for any of the parties, or any new parties which might be on the horizon are the 40% who are undecided. The government should remember that Clinton did win re-election two years later. Most people realised that their frustrations could bring them a Newt Gingrich / Bob Dole double act and weren’t quite so keen on that one. But Iceland can not afford a repeat of what happened in 2000 in the US. The long term consequences of an unreformed Independence Party in government could be catastrophic.
Because of time limitations (only 24 hours in the day) I am very grateful to Vilhjalm A. and Gandri for putting down in words exactly what I have been pondering about what Johanna Sigurdardottir calls the “definite solution to finally meet the required needs of Icelandic households”.
From Vilhjalm A. (translations mine ):
Finally the government has come out with their version the of the “skjaldborg” – the fortress around Icelandic homes.
Here’s what the government proposes to do:
- special solutions for those with low income or have suffered short term drop in wages
- solutions for people with two homes
- lower limits on penal interest rates
- on foreclosure, the market value of homes will be withdrawn from claims
- people will be able to live in their home for 12 months in spite of bankruptcy or foreclosure
- the limits on collection fees lowered
- rules on tax claims write offs reviewed
- moderate write offs tax free
- large write offs taxed
- effects of price indexation limited
The average employed working Icelander with a mortgage gets ….. just about nothing. No reduction / write-down of the mortgage principal. No way to negotiate with the banks, except by filing a lawsuit against them.
But if you own TWO homes, congratulations, you get relief – just give back one of the houses!
Oh my! This is going to be costly. How should we finance the rebuilding? – Johanna and Steingrimur at the household debt cliff drawn by Halldor Baldursson
See the critical article by Samtök lánþega blog, entitled “Ekki neitt !” (Nothing!): http://gandri.com/?p=885
There is nothing on previously defined solutions for mortgage adjustments.
There is nothing there on actions to force financial institutions to abide by the laws.
There is nothing there about interpreting unclear contractual obligations in the favor of consumers, as is clearly stated in Icelandic law that it should.
There is nothing there about actions to stop collection methods based on contracts which have been judged illegal by Icelandic courts.
There is nothing there about speeding up those court cases awaiting a Supreme Court’s decision.
There is nothing on the ideas of individual MP’s about the so-called “key-bill”.
There is nothing there on the ideas of individual MP’s about lowering the statue of limitations on individuals from 10 years down to 4.
Vilhjalm A again:
In the meantime the banks are happily handing out huge loan write-downs to businesses and granting themselves salary bonuses.
I don’t think it’s possible any longer to pretend that the government has some secret plan or motive to help the average Icelander. And the do-nothing strategy is not the result of ineptitude, either. It’s looking more and more likely that the real intention of the government is to reduce the need for imports by depriving the average person of almost all available discretionary spending, first by increasing taxes on everything and second by making them spend almost all their money on paying off loans to the banks. You can’t spend what you don’t have.
Finally my own two cents: The way they presented these “solutions” does not bode well for the Social Democrats or the Left Greens. Sure it is a step in the right direction, but the focus is on soothing the pain for those who overextended themselves during the good times, a strange emphasis for the so-called “welfare” government. It might be possible that there has developed a siege-mentality within the government after the monumental tasks it has faced since assuming the responsibility to clean up in the economic disaster area. But by calling this a definite solution and pretending like this is going to put things to rest regarding the massive household debt Icelanders are facing because of the collapse of the krona, the government appears out of touch.
The banks are now agitating for re installing bonus systems for the employees of their private banking and corporate banking divisions.
Now it is great if bonus systems are available for employees, but when implementing those some basic questions must be answered. What are we rewarding?
Remember, these are the banks whose collective bankruptcies put them in third place over the largest corporate bankruptcies in the US according to Jared Bibler of the Financial Authority!
Anywhere in the US! Ever!
Just Kaupthing manages fifth place on that list, above such luminaries as Enron, Texaco, Chrysler and Pacific Gas. Landsbankinn is in ninth place and Glitnir tenth.
The result from Iceland’s heady experiment with becoming a global financial player is three Icelandic businesses which would make the US top ten bankruptcy list!
Three!
For a country with just over 300.000 inhabitants that must be some sort of galactic record.
Those bankruptcies can hardly be blamed on the staff of the banks’ retail branches who were lending mortgages, overdrafts and credit cards. No the problems must have really started at a higher level. Like private banking and corporate banking.
And the staff is much the same as before the crash. And now they want bonuses again.
How does that work? A successful private banking employee works the phone and his contact list again and again to make money for his division. Do Stefan and Anna really pick up the phone and say, “Hey remember that 100 million you entrusted me with in 2006-2007? Yeah, shame about that. But let me tell you about the great opportunities our asset management team has discovered for you now”.
What on earth are their customers thinking?
There shouldn’t be any reason for any customers to continue banking with the same people and the same banks…unless.
Unless those same customers have benefited somehow from handsome write-offs. And that would especially make sense at the corporate level, and to a lesser extent in private banking.
Anyhow, what is going to happen if these bonuses are not approved of? Are these employees just going to stand up and leave?
And so what? Where are they going to go? Are they really sought after in the City, Wall Street, Dubai or Copenhagen? The management should at least not worry about finding enough talent to fill their shoes at this moment in time. With close to 10% unemployment and a highly educated workforce, that shouldn’t be a problem.
Social Democratic MP Robert Marshall today said that if these bonuses would become reality then they should be taxed to the hilt. A welcome sign that there still is life in that party. But would the Social Dems really dare? Or are old habits really just too hard to break?
The minister of social affairs now wants to write off car loans which are overextended down to 110% of the market value of the car.
A big relief for those who have seen their loans double, but a major folly.
Yesterday I heard a Social Democrat explain how the Independence Party majority in Reykjavik’s city council was sitting pretty having adopted a Social Democratic hue.
It is outrageous to think that the Social Democrats are turning the same trick in government and playing Independence Party ball. Instead of erecting that fortress around Icelandic households and tackling the debts which are plaguing those who were financially responsible before the crash, the government and the banks have wasted no energy in saving those who loaded themselves with debt, and took those riskier currency loans instead of loans in ISK.
So who were able to get 90-110% loans in the preceding years? Who were avidly speculating in currency loans? Could that group be mostly comprised of bankers and business owners? Those who had higher wages which now have maybe been halved or more.
Consider the cases of these fictional Icelanders:
A) Who took a 100% currency loan on a 30 million ISK home and has seen it go up to 60 million ISK. Market value today estimated at 25 million. Ends up with 27.5 million after the banks and the minister of social affairs have had their say.
B) Who saved 10 million, bought a 30 million ISK home and has seen the 20 million loan go up to 24 million. Market value today estimated at 25 million. No write offs!
Rewarding the risk takers? From which end of the spectrum is Arni Pall Arnason and the Social Democrats approaching the debt issue?
This is especially interesting following the revelations that the new banks got the loans transferred from the old banks at a 31-47% discount.
And then the Gylfi Magnusson, minister of economic affairs has said that the banks are unable to write off loans for average customers because they have to write off such huge amounts for businesses. Others say that that is not true, those were left in the old banks. Which is it? We don’t know because there is extreme breakdown of communication from the government to its people.
So the government which was going to erect a fortress appears to be building a future on building new banks on the backs of average customers and writing off loans for those who took the highest risks
This is all the more galling since there has been an array of advice from world class economists like Stiglitz, Zingales and others available to the government. But maybe the 110% folly is just preferable for some reason? Maybe Icelandic politicians have not been trained to look outside themselves and their own ranks for solutions.
The Icelandic government’s economic advisor Tryggvi Thor Herbertsson, on a leave from his post as CEO of Askar Capital Investment Bank and two years after his whitewash report on the Icelandic economy with Columbia professor Mishkin, with some interesting promises to the BBC on October 4, 2008.
What happened next? The Independence Party’s voters elected Tryggvi as an Althingi MP.
Also in the beginning, a certain someone who says he tried to warn everyone about the impending disaster.
And Hannes Smarason of FL Group fame personal debts to Landsbankinn amount to half the IceSave amount owed to the Brits and the Dutch according to the latest calculations. Of course without proper collateral or what?
Through elaborate twists and turns Catharine Zeta-Jones had to risk her life in a break in to get her hands on the jewels she coveted in Entrapment.
But if you happen to own or control a business which has been bankrupted in Iceland in the last couple of years, the way back to 2007 is made easy by the country’s banks, accountants and business laws. Through those channels, twisting and turning is made strikingly less hazardous.
DV reports that the owner of Leonard, one of Iceland’s most prestigious stores handling jewellery and fine watches transferred the operations onto a new social security number and signed an agreement with his wife that she would assume control of the new company. Last week he was declared bankrupt himself. But through this manoeuvre the couple has managed to get rid of the old debts but still keep the store.
This is not an exceptional case, but a blueprint for why so many of the most reckless business people of the last decade are still heading the companies they’ve run into the ground.
This is why Geir Haarde and David Oddson used to say their aim was for Iceland to become a “business friendly” country.
I for one don’t understand why business schools bother with explaining basic rules in finance and economics to their students anymore. Why are they still teaching that “those who assume the greatest risks also should reap the greatest rewards because they can also incur the greatest losses”?
Why don’t they just teach students how to create two business entities and shove debts into one and assets into the other? You keep your assets and the debts fly off to “money heaven”.
Wasn’t that also how IceSave was supposed to work for Landsbankinn’s owners and management team?
It is self explanatory that there is not much sympathy worldwide for a country which first behaved irresponsibly and then tried to export its problems to other countries.
Like other countries which have run their economies into the ground – including Greece as a good example - Iceland must take responsibility for itself. So even if the Icelanders voted no and every last one of them had banged pots and pans in the streets of Reykjavik, the global community has to remain steadfast. If the Icelanders can not agree with the Dutch and the British about payment terms, then they naturally can not expect further loans from either the IMF, the Nordic countries or progression in the EU talks.
It must be noted for fairness sakes that the Icelanders have underlined that their position is not one of not paying, but about the details. And Netherlands and the UK have listened. When Iceland voted no anyhow, the two countries had already offered a better deal, which the Icelandic leadership had already rejected as not good enough. It does not bear witness of either humility or sense of reality.
“I think what is happening in Iceland proves that our own currency is very beneficial to our needs. You don’t have to go far back to see that the currency developments have increased the competitiveness of Icelandic businesses and industries”.
- Steingrimur J. Sigfusson, Finance Minister of Iceland two years after an economic collapse all but wiped out the Icelandic financial sector after years of “hot money” flowing into the country because of exorbitant interest rates imposed to battle inflation.
He is crediting the arsonist for bringing a bucket of water to the fire.
What he is really celebrating is Iceland moving one step closer to the developing world and improving our “competitiveness” through a worthless currency. Never mind the comparative loss of wealth to citizens in the developed world.
A classic argument for not joining the EU and improving the livelyhood of Iceland’s citizens.
The party which got Icelandic society into this mess could just hold the keys to make things right.
It is quite a bit strange to hear people say that they would still vote for the Independence Party today, even after its Icarian flight of the past two decades and its nepotistic distribution of the wealth of the nation.
But it so happens that there are sensible, moderate people lurking in the party’s backrooms. They just have to start claiming their party back from the fanatic right. It is time for them to build from the ground what many Independence Party members think their party is about, a democratic party favorable to independent business owners and individual rights, and weed out the frentic big government, oligarcich Friedmanites (yes, the irony but that is what the party had become).
The party attempted to confront the need to reform itself in the wake of the 2009 elections and produced an interesting self-examination and plan for a new beginning. But by stirring fresh and old wounds alike, the still hypnotic Great Leader managed to stir up enough hate and venom at the party’s convention that it put those plans to a halt.
David’s heir, Bjarni Benediktsson has appeared too frail to go to work on claiming the party back for its people from the special interests of fishing quota kings and fanatic republicanite ideologues. A large part of voters of the party have been had for fools for too long now and would doubtlessly celebrate a lead from a leadership who is not afraid of the world around them, who attempt to distribute the wealth in the most efficient directions and is committed to building a prosperous nation instead of self-serving billionaires.
The old ghosts could be pushed out to the fringes where they belong with the Progressive Party. At a time when Iceland is divided because of those interest groups, a reformed Independence Party migh just hold the keys to a successful reconstruction. The moderates need to step out and claim their place, if they don’t they risk unsettling their country even more. But that place will not be theirs unless they stop the rot.
With a smug grin he revealed last night and today what he had wanted all along. It wasn’t a national referendum on IceSave. It was for the government he opposes to resign.
Steingrimur J. Sigfusson asked the nation how it thought an agreement could be made with a saboteur on our very own negotiating team.
Of course Sigmundur David Gunnlaugsson, chairman of the Progressive Party and founder of the InDefence pressure group would never have dreamt up a more favorable situation. Half of the nation had bought his spin and handed him the spin necessary to demand a clear path to the power tables. Preferably before the congressional report on the economic crash due out soon.
I hate to say I told you so, but I did and Icelanders were played by a snake oil salesman and too many of them bought it. He has divided the nation and now humbly offers to lead it from distress.
The enemy does not have Iceland’s interests at heart. It is all about the money (did we mention how he became a billionaire through an unholy alliance of politics and business) and the mandate to lead Iceland during these turmoilous times when the wealth and debts of the nation are distributed.
Iceland’s enemy number one has revealed himself and his name is Sigmundur David Gunnlaugsson.
Tomorrow is the first national referendum Icelandic citizens have been allowed to participate in by the political elite since the conception of the republic in 1944. By all measures, this should be a happy day for democracy in Iceland.
But instead it is not a cause for celebration but a large milestone in the farcical power play which has taken place between the four largest political movements in Iceland since 1944.
Yes, a farce. “Isn‘t that what this whole thing really is”, asked a Dutch journalist yesterday after surveying the scene? It is a sad day.
The media has a lot to answer for
The media has a lot to answer for. Instead of allowing people like law professor Bryndis Hlodversdottir and political science professor Svanur Kristjansson to explain to the nation why this isn’t good democracy, the media has instead handed the microphones to red-faced, unbalanced Sigmundur David Gunnlaugsson, chairman of the Progressive Party whose political career has revolved around kicking up as much mess as possible around IceSave. It makes for a better TV than a balanced approach and it creates pressure on the government he opposes.
In his wake you can see the pressure group InDefence whose members include Progressive Party players and someone who was recently kicked out of the Central Bank for bypassing the currency restrictions which are supposed to be holding our economy together. And the rabble rousers from the Independence Party who are glad the spotlight isn’t on them.
Why isn’t the referendum good democracy? Well, the question is useless as there is a better offer on the table. The information to make an enligthened decision have not been easily available. And the consequences of a yes or a no are unknown. And how do you vote on whether your nation should pay its debts or not? Of course nobody wants to pay. But that is what three governments have now promised Holland and the UK that we are going to do. The rest is just details, isn’t it? And we can argue endlessly over details can’t we? Did the government or the opposition ever tell us what their goals were regarding payment terms, interest rates and such? What exactly is an agreeable agreement to Iceland?
So far, no details have been good enough for the opposition, which includes the Independence Party who would have agreed to a less favorable agreement a long time ago if only they were still in government. And to some people it seems like any deal is a bad deal because then the spotlight will turn towards other matters? Could it be that Iceland’s enemies are not abroad, in Amsterdam or London but actually in Reykjavik, Blonduos and Akureyri? So far, the problem hasn’t been about Iceland’s democratically elected government not reaching an agreement with the UK and Holland. It has been about not reaching an agreement with the opposition. The opposition, coupled with a few Left Greens who think that Iceland’s future as a self sustainable country in the vein of Cuba is viable, has stalled, filibustered, argued and kicked up a storm at every turn. Some academics have suggested that every month stalled has cost Iceland 70 billion ISK or so, a large chunk of IceSave. Are the small details really worth it or are more sinister forces at work here?
For the opposition’s part, the longer this thing drags out the more turmoil there will be in Icelandic society. And who will the voters blame? Well, of course the people in government. And then the way is clear for the opposition to resume power. And don’t think for a minute that they would not try to negotiate with the Brits and the Dutch.
Olafur Ragnar Grimsson. The cheerleader of the business-vikings who raped and plundered Iceland. (Finnish president Halonen not included)
The political elite has a lot to answer for
The political elite has a lot to answer for. Olafur Ragnar Grimsson, a lame duck president, paralyzed by his constant smooching with the money-men of yesterday, has suddenly turned the tables somehow to making some foreign journalists believe that he is at the forefront of a fight against capitalism. Don’t be fooled. It was just about his own legacy, and the trouble the four parties have created by constantly refusing constitutional reform which would sharpen his role and responsibilities. They never did because they don’t want to limit their own powers. It is a diabolic merry-go round.
The people have a lot to answer for
The people have a lot to answer for. We have voted for bad politicians and we have voted for a bad system. And we have been fooled into all sorts of bad positions because we are hapless joiners who too easily take sides with demagogues and snake-oil salesmen to easily. The mob has allowed the political elite to maintain its grip on society. Recently it has mindlessly signed petitions for InDefence and Thjodarhagur, honked horns with a slightly facist New Iceland and gathered at an Anthill for a Nation’s Meeting without asking who is behind all these groups and what is their purpose. And now it will flock towards a referendum where one of the options is out of the question, and in many cases not having a clue what they are voting for. Iceland not paying any debts. Count them in.
So what will happen tomorrow? A big no vote of course. And what does it mean? Some people think it is a message of some sort which will improve the negotiating position of Iceland. But really?
Three likely scenarios
a) The government keeps going and attempts to find a solution with the UK and Holland on the grounds that “people are against paying these debts”. Why would the UK and Holland see that as an argument? Those countries can wait. The IMF loans could wait as well. The government is backed into a corner and has little options but to resign.
b) The government keeps going and attempts to find a solution with the UK and Holland on which the opposition can agree to. Which is unlikely, because the opposition can wait until things are so tight that it can assume power on a wave of discontent.
c) The government resigns. The current opposition resumes negotiations and quickly finds an “acceptable deal” with minor adjustments which they will take credit for. The new opposition kicks up a storm. Then what? A new national referendum on that deal?
Bjarni Benediktsson and Sigmundur D. Gunnlaugsson. Opposition party leaders and billionaires.
It is really a whole big mess. And it does not make one proud of being an Icelander. What is currently taking place in Iceland has nothing to do with democracy. It is cold hard realism which has everything to do with power and money. Consider who is leading the opposition. Two, middle aged men who have become filthy rich through the cosy relationship between politics and business in the last few decades. They want people to think that this is about democracy, independence, justice and standing up to the man.
And the real enemy within escapes the attention meanwhile and grows stronger from the strife.
It is a sad day. The first national referendum of the republic since its beginnings and it is for the political elite, by the political elite and benefits the political elite. There could have been so many other more apt matters and issues for the nation to deliberate on, the fishing quota system, support for the war in Iraq, constitutional reform. But no, instead we get this farce.
If you are a foreigner taking a look at the national referendum this Saturday, please don´t make the mistake of thinking it is about IceSave.
It is all about internal, Icelandic politics.
Those who will vote yes are voting for the government to stay on (Social Democrats and those who still think Steingrimur J. Sigfusson is the leader of the Left/Greens).
Those who vote no are voting for the Independence Party and the Progressive Party (People who would absolutely love for it to still be 2007).
A few naive souls will vote no because their life values commend them that anything to do with banks and business is something you should say no to (mostly Left/Green naivists and people who look like they are roadies for Jimmy Buffett).
“Would you like the EU to take the credit for our victories?”
Does this video imply that we can claim victory if Germany, France or Spain wins the World Cup in July? Or that we can claim victory no matter who wins Eurovision? And does this mean that people in Spain take great pride in Norway’s gold medals at the Winter Olympics?
Well…although I am dumbfounded that someone could be so incredibly stupid to think that EU membership would lead to this, I am sure that this is just the beginning of the most ridiculous national debate in history. And I would not bet against the standard being lowered even further.
Of course the people responsible for this wish to remain anonymous. Iceland’s worst enemies are truly not outside the borders, they are hiding within.
…oh, and the Independence Party has added ten MP’s in the latest polls.
We got an interesting lecture yesterday from Pall Asgeir Davidsson, who heads the Ethikos project within Reykjavik University. Ethikos’ mission is to heighten awareness of corporate social responsibility in Iceland so it is one of the most needed institutions today.
Pall Asgeir’s lecture came the day after Tryggvi Thor Herbertsson, Independence Party MP, former investment bank manager and main defender of the 2006 version of the Icelandic business model told TV audiences that it is questionable to use ethics to determine which businessmen would get to keep control of the companies they’ve ruined in the last few years. A co-dependent Social Democrat MP on the set, Magnus Orri Schram didn’t have the balls or integrity to challenge that assumption so you could say that Ethikos has its work cut out for it.
I asked Pall Asgeir about the main pressure facing western companies and their CEO’s in comparison to Chinese for example, to post favourable quarterly earnings reports, thus perhaps ignoring the long term prospects of their company. He said that it was clear that our tools of measurements needed reviewing and talked about the curious case of a tree which alive contributes oxygen and life to our planet, but nothing towards GDP. Once it is cut down on the other hand, it becomes valuable as timber and other commodities.
I also asked him about the other and not less important CSR, or consumer social responsibility. While businesses find it increasingly relevant to act socially responsible and even more so to tell everyone about it, there can be a big gap in difference between what you say and what you do. Take for example Bjorgolfur Gudmundsson who was sneeringly nicknamed “Santa Claus” in Icelandic business circles around 2005-2007 because he did not miss a chance for a photo op with sick children, struggling musicians, famous football players and poor artists who were the proud recipients of Landsbankinn’s generosity. Consumers have to provide checks and balances against such diversions by voting with their feet. And not just by choosing different grocery stores or banks, but also by examining what exactly it is that the political parties they have been voting for have been doing in the past few election terms?
Pall Asgeir agreed that the two CSR’s had to go hand in hand. He said how consumer social responsibility had pressured corporate social responsibility into actions in some areas of mining in Africa. If there is hope for a clean up in the blood diamond trade, then there could be hope for Iceland. But just not yet, while on one hand we hear Arion Bank claiming that Johannes Jonsson is the best person to lead the Hagar grocery empire, and on the other that he had been siphoning out money from his businesses in October 2008 to invest $1,5 million in a villa in Florida which is out of touch for the solvency committees trying to clean up his previous mess.
And how can Icelandic consumers ignore the inexplicably behaving Belgian bank Fortis who has demanded that Olafur Olafsson, who got to buy Bunadarbankinn by borrowing money from Landsbankinn and turn it into Kaupthing, whose wealth is dependent on his Progressive Party ties and who is under investigation for market manipulation, should be allowed to retain control of Samskip, the shipping company he also loaded with debt that needs to be written off?
Stop reading Tintin and refrain from drinking Stella?
