Reykjavík Grapevine - 28.08.2010, Side 14

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The Reykjavík Grapevine
Issue 13 — 2010 Egill Helgason is a man of many talents, in case you were wondering. Besides
running a political talk show on Icelandic State TV, he a also runs a literary
programme there. And he blogs a lot for web-site Eyjan.is. Kudos to you, Egill.
Analysis | Egill Helgason, Political and Social Commentator
Sitting Here In Limbo
Almost Two Years After The Crash, A Time
Where Nothing Gets Resolved
The political situation in Ice-
land, now that autumn will
soon be upon us, can best
be described as a sort of
a limbo. We’ve had two
very dramatic years, start-
ing with a currency crisis and
the collapse of the financial system. For a mo-
ment, in early 2009, during the so-called Pots and
Pans Revolution, things seemed quite clear – the
government that has presided over the fall was
toppled, the governors of the Central Bank were
forced to leave in disgrace, people in general were
very engaged in politics, there was a sort of awak-
ening, there was talk of a New Iceland.
But now everything seems to be terribly mud-
dled. The feeling is a bit like in the Bunuel movie
El Angel Exterminator depicting a group of people
who, for some reason, are unable to leave a din-
ner party. Nothing seems to get resolved. Nobody
leaves – most of the old faces are still around. And
there are ongoing problems that stubbornly refuse
to go away – they keep coming back, making ev-
erybody more irritated each time they return.
RETURN OF ICESAvE
Negotiations on the long-drawn Icesave dispute
between Iceland, Britain and Holland are set to
resume this autumn. There have been no meet-
ings since Iceland’s referendum on Icesave last
March. The referendum was supposed to be a
turning point – it was not. The nation is waiting for
the High Court to decide whether loans indexed
to foreign currencies and given out very freely by
the banks were, perhaps, illegal – a decision which
might be a huge blow for the renascent banking
system and will definitely be badly received by for-
eign creditors.
There is an ongoing dispute as to how Iceland
should use its energy resources, hydroelectric and
geothermal; whether private companies – even
foreigners – should have a part in this, or whether
utilisation of manifold waterfalls and hot springs
should be solely in the hands of the government.
Then there is the debate on Iceland’s applica-
tion to join the European Union. This is already
quite ugly and it is set to grow fiercer still – maybe
almost to the point of splitting the nation. Among
the claims now made is that the EU will take over
all our important resources (fish and energy), kill
off Icelandic agriculture and that young Icelandic
males will be forced to join an EU military force.
IMPOSSIBILITY OF DISCUSSING IDEAS
Iceland is a small country where public debates
soon get intensely personal. It has been said that
whereas Icelanders will often be able to tell a good
story, they are incapable of discussing ideas. Hall-
dór Laxness, our Nobel Prize writer, wrote in his
book Innansveitarkónika:
“It has been maintained that the Icelandic people
are not easily swayed by arguments of reason, let
alone financial arguments and less still the ar-
guments of faith, but resolve their issues by the
twisting of words and bickering about irrelevant
diddly-squat; and that they become paralysed by
fear and lose their speech whenever the core of an
issue is touched upon.”
NOBODY AGREES ON ANYTHING
I met one of the leaders of the Pots and
Pans Revolution downtown a few days
ago. He had been quite an apolitical
person before the collapse. But, like many
people, the level of corruption, incompetence and
lying that was exposed by the financial crash as-
tounded him, and so he became an activist.
But now he said he was giving up.
"Nobody seems to agree on anything," he said.
"I attend meetings and people just keep on argu-
ing. Sometimes they are just unhappy that the idea
came from the wrong person."
"I really can’t be bothered any more," he added.
RADICALISATION OF POLITICS
There is a certain radicalisation of politics in the
country. Until 2008 Iceland followed a steady
course to the right under pro-finance govern-
ments with a liberalist agenda of privatisation. At
this time the rich were getting richer – income dis-
tribution had suddenly become very unequal in a
country that had always prided itself on egalitari-
anism. Bankers and financiers and their hangers-
on were feted as national heroes – many seem to
be eager to forget this part. This was formulated
by a then-celebrated right wing ideologue who
said: Normal Icelanders want to make money dur-
ing the day and barbecue when they come home
in the evening.
This chase after fool's gold was based on an
overvalued currency and easy credit, and it ended
in disaster. Now there is a reckoning for many
people. Households in Iceland are very indebted
– a source of much discontent – and there is a
marked shift to the left over nearly the whole of the
political arena. Practically no one dares advocate
traditional right wing policies; the old apostles of
liberalism are quiet, except when they’re trying to
find excuses for their legacy.
This is most markedly seen in the debate on
Magma Energy, a Canadian firm that bought a
majority share in HS Orka, a bankrupt Icelandic
geothermal company. This is now perceived as
a major travesty, certainly on the left wing but
also among many right-wingers. Only a few years
ago government policy was to privatise energy –
health and education were also on the agenda.
But now nobody seems keen on putting power in
private hands. Even the old privatisers can’t seem
to recognise their old selves any more.
A LEFT WING GOvERNMENT
We now have a left wing government – nominally
the most left wing government in the history of
Iceland – but it is disputed how far left it really is.
Part of its electorate has swung even farther left.
Admittedly its hands are tied. Iceland is on a strict
programme from the International Monetary Fund
(IMF); the current budget deficit is 25%; there are
harsh currency restrictions in place, otherwise the
króna might collapse again; big cuts will have to
be made – 9% is the figure named for this year.
The government's plan is to spare the health and
welfare system as much as possible; after all, it
calls itself the government of "Nordic Welfare".
Taxes are going up. Iceland does not have the
option to spend its way out of the crisis. During
the former right wing governments, in place for 17
years, the tax
burden of the
highest earners was relieved. The idea of taxes be-
ing redistributive had almost been abandoned. But
now affluent people are being taxed more heavily
and levies on alcohol have gone through the roof.
Even if the government wanted to it might not be
able to afford to buy Magma's stake in HS Orka.
Nationalisation might of course be another way,
but that is a tough choice at any time, and it might
not go down well with the IMF and the European
Union (EU).
A FIGHT ABOUT CAPITALISM ITSELF?
So politics in Iceland have become more radical
– and more querulous. On the left we see a resur-
gence of militants, anti-globalists and even Marx-
ists, many of whom genuinely seem to believe that
this is now a fight about capitalism itself. Hav-
ing been marginal for a long time, they are now
finding more people who appreciate their kind of
politics cum activism. Many of these people are
or were members of the Leftist-Greens, whose
leadership is accused of betraying their leftist cre-
dentials by working with the IMF, negotiating with
the EU and restoring the banking system. Two of
the three large banks have now been nominally
taken over by foreign creditors. The meetings of
the parliamentary group of the Leftist-Greens are
said to have become emotion-laden gatherings
where MPs burst into tears or shout at each other.
RIGHT AND LEFT UNITED AGAINST THE EU
By far the most vocal group on the right is the anti-
EU faction. At the moment it practically dominates
the Independence Party, the broad right wing
party that has been in power in Iceland for most
of the republic’s history. This anti-EU sentiment is
promoted by Davíð Oddsson – former prime min-
ister and governor of the Central bank and now
editor of the daily newspaper Morgunblaðið – and
by a group of very vocal bloggers who thrash their
opponents with accusations of treasonous be-
havior daily on blog.is – a blogsite connected to
Morgunblaðið.
The Independence Party also has a pro-EU
faction, more in line with the Scandinavian right
wing parties, but it is cowed by Oddsson and the
blog army. There have been murmurs of it leaving
the party, which is held together more by its his-
tory and traditions than its political coherence. But
now nationalism is more the order of the day than
liberalism.
A government of Leftist-Greens and the Inde-
pendence Party has even been suggested though
this could only happen after new elections. The
parties – or their forerunners – were in govern-
ment together right at the end of the war, between
1944 and 1947, when it was thought wise for
democratic parties to work with communists. At
the outbreak of the Cold War this became an im-
possibility. So an alliance between the two parties
would be a historic moment – its first job would,
of course, be to withdraw Iceland’s EU application.
WILL THE PUBLIC
LOSE INTEREST?
But the public that be-
came very politicised after the crash is fast losing
its interest. Trust in politics and parliament is near
nonexistent. After the collapse this was manifest-
ed in demonstrations – now it seems more likely
that people will withdraw into their houses during
the long Icelandic winter months. Paradoxically
there are even signs that The Independence Party,
blamed by most for the collapse, might regain its
former position. Maybe because the party is a
phenomenon that people know and think they un-
derstand – rather than the uncertainty and confu-
sion that reigns.
The public debate is very confusing, with blog-
gers shouting abuse, small matters blown out of
proportion and big issues going unresolved. Cer-
tain crash-related elements seem only to have the
agenda of creating confusion. To avoid the inves-
tigations and, perhaps, the judgment of history,
nobody has really accepted responsibility for what
happened. In this clamor it is very difficult to dis-
cuss ideas, the future, or real structural changes.
All this does not bode well for a constitutional
assembly due to be held next year. We now have
a very outdated constitution, handed down by the
Danes in 1874. Icelanders have never given much
thought to constitutional matters and the politi-
cal class has always failed at changing the con-
stitution. So now we will have an assembly of the
people – hopefully for the people – where the idea
is to leave vested interests and cliques that have
dominated Icelandic society at the door. But suc-
cess is by no means sure. This might end up being
a long-winded affair – even if a new constitution is
foreseen for 2013 – and in the end politicians will
surely be unable to keep their hands off it.
EGILL HELGASON
LóA HJáLMTýSDóTTIR