Reykjavík Grapevine - 08.01.2010, Síða 10

10
The Reykjavík Grapevine
Issue 01 — 2010
Later this month we will see the one-
year anniversary of the pots and pans
revolution that shook Reykjavík in Jan-
uary of last year. This miniature revo-
lution started peacefully, with people
banging saucepans and cooking pots,
but ended in street riots, fires and tear-
gas.
As is often the case with revolu-
tions, it was a small incident that
sparked the events.
Parliament was reconvening after
Christmas. Everybody expected it to
make a major effort on the crisis. But
the government of conservative Prime
Minister Geir Haarde was as ever dis-
connected from the populace—now
we even have the verb of "Haardering"
in the Icelandic language, meaning
basically to keep your head in a pile of
sand—so the parliament started the
new year by discussing a bill proposed
by a young and rather silly politician of
Haarde’s party, calling for alcohol to be
sold in supermarkets.
Maybe a large issue for some, but
by most this was perceived as being
a symbol of how far the political class
had alienated itself from reality and,
with a peculiar mixture of liberalism
and cronyism, handed power to cliques
of bankers and financiers, many of
them originating in the grey zone be-
tween politics and business.
Icelanders, a nation more given to
grumbling than manning the barri-
cades, were suddenly out in force, ex-
pressing their total discontent with a
political system that had led the nation
down the way of ruin. The highpoint
of these events, just a year ago, was
the burning of a huge Christmas tree,
given to Reykjavik annually by the city
of Oslo as a token of goodwill.
As the tree went up in flames, the
police brought out their teargas canis-
ters—a turn of events unheard of in
Iceland.
In Iceland it is referred to as a revolu-
tion—"bylting" is the Icelandic word. It
surely toppled the government of Geir
Haarde, which drifted with all senses
shut into the collapse of October 2008,
all the time claiming that the problem
was rather one of image—a misunder-
standing of the Icelandic economy—
than substance. "Incompetent govern-
ment" was a popular slogan during
these days.
The Social Democrats, a junior par-
ty that had entered the coalition gov-
ernment with Haarde’s Independence
Party in 2007—The Independence
Party having led the government ever
since 1991—took fright after a party
meeting in the basement of the Na-
tional Theatre was literally mobbed
one night. The Social Democrats then
proceeded to form a government with
the socialist/environmental Left Green
party, which actually can trace some of
its origins all the way back to the Ice-
landic Communist party that formed
in 1930.
This is, at least on paper, the most
left wing government in Icelandic his-
tory, referring to itself as a government
of Nordic Welfare. The Prime Minister
is Jóhanna Sigurðardóttir—often re-
ferred to as Holy Jóhanna—chosen at
the time of the pots and pans revolu-
tion because she is thought to be incor-
ruptible and is also a figurehead of wel-
fare politics. But it soon transpired that
the strong man of the government, the
real fighter, is Steingrímur J. Sigfús-
son, Minister of Finance, the leader
of the Left Greens, a prematurely bald
country boy who entered parliament
at a very young age in 1983. Sigfússon
has spent most of his political life as a
member of the opposition and many
were waiting for him to retire—as is
also the fact with Jóhanna Sigurðardót-
tir.
But then, by this strange turn of
events, he is now in the position of the
most influential man in the govern-
ment, the man who is everywhere, do-
ing the fighting, putting out the fires,
cleaning up the mess, earning grudg-
ing respect, but not necessarily becom-
ing more popular.
Maybe the government’s chosen
slogan isn’t good enough. It is very dif-
ficult to dole out Nordic Welfare in a
country that is almost bankrupt. The
government has in fact seen no other
option but to follow the prescriptions
of the International Monetary Fund
to the letter, in fact it shares its power
with the IMF governors. Many of the
hardest left-wingers in government
have been forced to change their ways;
they have even accepted an applica-
tion to join the European Union, total
anathema to the Left Greens until re-
cently. And most of the party has been
forced to campaign for the acceptance
of Icesave, the reimbursement by Ice-
landic taxpayers of money lost through
savings accounts in several European
countries.
“Cleaning up the mess,” is a phrase
that Sigfússon uses frequently.
A revolution devours its children.
This can be said of the government
that came into power through the pots
and pans revolution, which seemed
full of promise for a few months last
year but now looks weak and full of
contradictions. It has three major prob-
lems it has not managed to tackle:
1. The terrible household debt, ag-
gravated by the total collapse of the cur-
rency, lowering of housing prices and
the strange Icelandic phenomenon of
loans being indexed to the rampant in-
flation (while pay and savings are not).
2. The question of what to do with
the companies that have fallen into
the hands of the government and the
banks. Included are many of the na-
tion’s major companies, as well as the
large holding companies that owned
practically everything at the time of the
boom. All the latter companies are now
bankrupt, with a horrible ratio of debt.
How do you redistribute the wealth
of a society that has collapsed? Even the
fishing industry, once again the pillar
of the economy, is riddled with debt,
brought on by speculation with fishing
quotas where huge sums have disap-
peared into offshore accounts.
Despite its left-wing credentials
the government seems to be set on
doing this in a very old guardish way,
through the partially restructured
banks—now nominally in the hands
of foreign creditors—but in reality run
by Icelandic lawyers and economists,
many of whom are linked to the for-
mer elite, which was the problem in
the first place.
The most famous instance is Jón
Ásgeir Jóhannesson of Baugur fame,
who in the heyday of the Icelandic
‘venture Vikings’ owned many famous
brands on the high streets of London.
But this was built on his empire of
supermarkets in Iceland, which his
family still has control of. Jón Ásgeir ś
total debt is thought to be about 1.000
billion ISK; he is surely one of those
who bankrupted the nation, but there
is talk that he might hold on to his su-
permarkets if he manages to negotiate
his debt, which is only a fraction of the
mess he has left behind.
And, to add insult to injury, Jón Ás-
geir still controls most of the privately
owned media in Iceland.
3. Icesave... This is a word that in-
stills dread—and perhaps boredom—
into the hearts of Icelanders. Icesave
has now been furiously debated for
more than a year. Originally this is
the moniker—thought brilliant at the
time—of savings accounts founded
by Icelandic bank Landsbanki in the
UK, Holland and Belgium. At the time
foreigners had almost stopped lending
money to the Icelandic banks, so they
devised a scheme: we will offer fabu-
lous interest rates, and we will be able
to fund ourselves by the money flow-
ing in.
Except there was no backup plan.
If the Icelandic bank went bankrupt,
there was nobody to guarantee the
deposits. The Icelandic insurance
fund was empty. And one day Icesave
just closed down, its web pages disap-
peared; at the Icesave offices no one
answered the phone. It was, in short, a
scam.
Our neighbouring countries—
even our friendly Nordic neighbours—
soon decided that it was up to Iceland-
ers, our government and taxpayers, to
reimburse the holders of these savings
accounts, individuals, municipalities,
charities, up to a certain sum. Maybe
this is not unfair. But the sum of mon-
ey is so vast compared to the Icelandic
economy that this might even spell
doom for the recovery of the country,
which, though proud and enterprising,
has the population of Wichita, Cardiff
or Murmansk.
Icesave has dominated local politi-
cal life since the collapse. For Iceland-
ers this has turned into a nightmare,
the feeling is a bit like in the film The
Exterminating Angel by Luis Bunuel,
where a group of people are stuck in
a room without really understanding
why they cannot get out.
Shortly before New Year, Parlia-
ment passed a bill saying we should
2009 | Egill Helgason, Political and Social Commentator
Cleaning Up The
Mess: The Legacy
Of The Pots And
Pans Revolution
Noted political and social commentator Egill Helgason
has hosted Iceland’s main political debate show, Silfur
Egils (now showing on RÚV, alongside his literary
program Kiljan) for many years. Through his shows
and his blog on local news aggregator Eyjan.is, he is
undoubtedly a major influence on Icelandic discourse
and is known for his sharp, often hard-hitting analyses
of current affairs – especially in the aftermath of October
2008’s economic collapse.
For the next months, Egill Helgason will be writing
us a column detailing his take on and interpretation of
the preceding month’s events. The Grapevine is proud
and happy to welcome Egill as a contributor to the paper.
We feel his insights will prove an exemplary contribution
for international audiences and new Icelanders that are
interested in following the local discourse on a deeper
level.
Read RIGHT ON for his extended introductory
column, which should tell you some things about 2009,
in the spirit of this issue.
WORDS BY EGILL HELGASON
PHOTOGRAPH BY JULIA STAPLES
ILLUSTRATIONS BY LÓA HJÁLMTÝSDÓTTIR
“Now we even have the
verb of "Haardering" in
the Icelandic language,
meaning basically to
keep your head in a pile
of sand."
“And one day Icesave
just closed down, its web
pages disappeared; at the
Icesave offices no one
answered the phone. It
was, in short, a scam."
2009: Politics & Life