Reykjavík Grapevine - 24.06.2005, Blaðsíða 25

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Independence Party member Guðmundsson.
In addition, according to Jökulsson, relatives
of these Progressive Party members were in
positions to profit from the sale of Hafskip’s
resources.
If one believes Mr. Jökulsson’s account of
the Hafskip bankruptcy, and the vast majority of
the country does, then the lesson to be learned
is that one political party should not control
parliament, the justice system, a newspaper,
and have prominent ties to local business that
may corrupt decision-making. At present, the
Independence Party, not the Progressive Party,
has such power. The lesson learned by many
from this scandal seems to have been to give
other people a chance to be corrupted by power.
Beyond a political system that can easily lead
to abuse of power and cronyism, the Icelandic
economy has another fundamental difficulty:
a population of consumers and workers
unprepared for privatization and economic
growth.
As the average wage in the country has
increased to 2.6 million ISK per year from 1.8
million in only five years, according to Hagstofa,
the Icelandic Statistical Bureau, Morgunblaðið
has reported that personal debts are
skyrocketing. The personal debt in this country
increased from 709 billion ISK in 2003 to 879
billion ISK in 2004, up 14%. The average home,
according to the same Morgunblaðið report, now
has 8 million ISK in debt.
While researching for this story, the
Grapevine was presented with a few courses by
local barflies instructing us how to get a loan.
If you need a large loan, the best idea is to get a
friend or wealthy family member to deposit all
of their money into your bank account just as
you go to apply for the loan. The banks, we’ve
been told, only look at the last three months of
activity and at your bank accounts.
If you can’t find someone to put money
into your account, we were also told to find
short-term or independently contracted work.
Three months fishing or working construction
can get an abnormally high wage that the
bank will assume will be consistent year round.
Independent contracting can allow you to give
yourself large wages by not paying your taxes
until the end of the year.
As we were taught these tricks, we
consistently asked if they had been used
successfully, and we were given full back stories
of people who’d gotten large loans, up to 30
million ISK, complete with the sad resolution
that the friends were now defaulting on their
loans.
Continued on page 26
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