Reykjavík Grapevine - 05.11.2010, Page 12

Reykjavík Grapevine - 05.11.2010, Page 12
12 The Reykjavík Grapevine Issue 17 — 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 also runs a literary programme there. And he blogs a lot for website Eyjan.is. Busy man! Analysis | Egill Helgason Eva Joly shocked some of her admirers in Iceland when she said a few weeks ago that Iceland should join the Eu- ropean Union. For many of Joly's fans this was not acceptable. For one and a half years, Eva Joly has enjoyed a hero- ine status in Iceland. In a country sadly lacking in trust, she has been a force of almost unquestionable moral author- ity. Now she is running for president in France, but if rules allowed she could more easily become president of Ice- land. One of the results of the economic collapse in Iceland is a total lack of con- fidence in most institutions: the Parlia- ment, the banks, the civil service. There was talk of getting foreign specialists to help this scarcely populated nation sort out the mess it had gotten itself into—it obviously lacked experience. Not much happened. AN OvERNIGHT SENSATION Eva Joly came to give her opinion on the collapse in a television interview in March 2009. As is her custom, she was extremely blunt. She claimed that the of- fice of the special prosecutor, founded to investigate criminality within the col- lapsed banks, was a joke. The prosecu- tor himself was a totally inexperienced sheriff from a small town in the west of Iceland, appointed because nobody else wanted the job; he had no knowledge of white collar crime, and a staff of only three people. Eva Joly was an overnight sensation. At first the government wasn’t happy with her criticism, but she was adopted by the general public. Pressure on the government mounted. A few days after the interview, Joly was appointed as a special advisor to the prosecutor. She brought in foreign specialists and be- cause of her efforts we soon will have an office of ninety people, including four prosecutors, researching possible mis- deeds before and during the crash. This seems quite exemplary. FROM GRüNERLöKKA TO THE pAL- AIS dE jUSTICE Eva Joly has had an exceptional career. She is Norwegian by origin, born Gro Eva Farseth to a tailor in the modest Grüner- lökka neighbourhood in Oslo in 1943. The family was not rich, but the daugh- ter was blonde and quite beautiful. She went to France as an au pair, landed in a very bourgeois home and ended up marrying the son against the will of the rather snobbish family. She started tak- ing evening classes in law and later spe- cialised in financial law. Thus began her tireless crusade against corruption that eventually led her to become an investigating judge. She became famous for conducting the investigation of the Elf scandal—one of the biggest fraud inquires in European history, involving politicians and busi- nessmen—as well as the case of Bernard Tapie and Crédit Lyonnais. For some in France she was a folk hero, but the elite didn't like her much. She received death threats and bodyguards had to watch her around the clock. Before Eva Joly came to Iceland she had left her post as an investigating judge and was working for Norad, the Norwegian Aid Organization, travelling around the Third World advising on how to fight against corruption and capital flight. A pRESIdENTIAL CANdIdATE This was a fairly low profile job for this soft spoken but tough woman. Since then things have changed for her. She is now again one of the most talked about people in France. Soon after she came to Iceland she was invited to run for the European Parliament for the French Greens. She was second on the list, af- ter Daniel Cohn-Bendit, the flamboyant leader of the student revolt in Paris in May 1968. They adopted a very Europe- an platform and won a resounding vic- tory. And now it has been decided that she will become the presidential candi- date for the Greens in the 2012. This will probably not result in her becoming the president of France, but with her standing she might get a good outcome, given the ennui with tradition- al politics. And it is a credit to the French and their policy of accueil that Joly can get this far, despite being of foreign ori- gin and having dual French/Norwegian citizenship. NO INSTANT RESULTS But where will this leave Iceland, a coun- try that invested so much trust in Eva Joly. She terminated her contract here in early October, after one and a half years on the job. She was adamant that the investigation was now in capable hands and that we would see results. But many still eagerly await news from the special prosecutor’s office, indicating that the directors and the owners of the banks will be held responsible. Very little has happened as of yet. But then, Eva Joly never promised instant results. She herself said many times that the investigation would take a long time, and that one of the dangers was that the public and the press might lose their patience, and maybe turn against the prosecution itself. She cited instances where this has happened; in Iceland we have the experience from the so-called Baugur affair—instigated to look into the business affairs of tycoon Jón Ásgeir Jóhannesson—which was a total flop. ICESAvE, MAGMA ANd THE EU Eva Joly is a very blunt person, even though she seldom raises her voice. You ask her a question and she will usually try to answer it, short of compromis- ing an investigation. During her tenure here—she usually came once a month and stayed for four days—she started to become involved in Icelandic politics. This was not universally popular. The government was quite intimidated by some of her utterances, but because of her standing ministers really didn’t dare to confront her directly. She was very outspoken on the Ic- esave affair, claiming that it was outra- geous for the Icelandic public to pay huge sums for the horribly handled af- fairs of a private bank. Then she got in- volved in the Magma affair, where a geo- thermal company in the southwest has been sold to a Canadian financial adven- turer—Joly claimed that this was the kind of business that bankrupted Iceland in the first place. And lastly, when she ad- vocated that Iceland should join the EU, some of her supporters felt estranged from her. But others, who had resented her meddling in Icesave and Magma, were quite happy. But this is Eva Joly, not a person who fits easily into any category. (Full disclosure: The author of this article, Egill Helgason, invited Eva Joly for an interview on Icelandic TV in March of 2009, so he is partly responsible for her coming to Iceland in the first place). Words Egill Helgason Illustration Lóa Hjálmtýsdóttir Adieu, Eva joly News | Iceland in the International Eye: October Everything Well Under Control? Some of you may recall the wave of Nigerian scam emails that hit businesses the world over in the 1990s. Generally the offending email, a bit of f luff promising a hefty return on investment (supposedly penned by some ousted colonel or ex-bank manager on the run), would request the recipient to transfer an small per- centage to some offshore numbered account in the form of a deposit to secure the hidden millions. Stltoday. com, a St. Louis, Missouri news web- site, ran a story this month that the Lincoln County Sheriff’s Office was investigating a scam whereby the alleged Icelandic lottery was to pay out Missouri residents, winners of the so-called Icelandic office of the MTA Sweepstakes, after a one-time- handling fee of USD 1.000.00. “Win- ners” received fake cheques under the name of the Icelandic Lottery. Two years after the collapse of Iceland’s banking system, Iceland is still struggling to come to grips with the demise of everything that once made it the richest country in the world. The Special Investigator’s Office, working in collaboration with the UK’s Serious Fraud Office (SFO), are supposedly preparing hundreds of cases, yet the Icelandic nation has yet to see a single ‘bankster’ brought to trial. In October, The Daily Mail pointed out that the SFO is investigat- ing some of Kaupþing’s largest lend- ers. Among them Robert Tchenguiz, who borrowed over 1.2 billion GBP, which he used to buy stakes in UK retail chain Sainsbury’s, and Sports Direct founder Mike Ashley, along with three ‘unnamed’ others. Yet, the Daily Mail states that “the Icelandic government is keen for any trial to be held on the tiny North Atlantic island. But it is understood the authorities are not interested in pursuing any in- dividuals who do not have an Icelan- dic surname.” Does the expression “burying ones head in the sand” ring any bells? In a Bloomberg interview, Atli Gíslason, chair of the committee that recommended former Prime Minis- ter Geir H. Haarde’s indictment said, “I’m growing impatient waiting for indictments from the special pros- ecutor. I have strong indications that there was a lot of criminal activity within the banks from the beginning of 2008 leading up to their collapse; criminal acts were committed. In the same vein, it appears that despite a turnout of an approxi- mated 8.000 protesters in front of Alþingi on October 6, and Jóhanna Sigurðardóttir’s renewed promise of finding a workable solution for the massive wave of insolvencies, appears to have made little progress. Despite a five month moratorium on foreclo- sures, and numerous proposals put forward for a blanket debt forgiveness of the equivalent of USD 1.8 billion, the government appears to be giving into objections posed by the pension funds, which claim the blanket pro- posal will damage their assets and force them to reduce pension pay- ments (even further). Gunnar Helgi Kristinsson, a professor of political science at the University of Iceland, was quoted by Bloomberg as saying: “I can’t understand [Jóhanna’s sup- portive gesture] any way other than as theatrical…By pretending this was actually on the table and being con- sidered, Jóhanna managed to provoke opponents such as the pension funds, which look at these matters seriously and know this idea is completely lu- dicrous.’ As Bloomberg aptly stated earlier this month: “A write-down of USD 1.8 billion is equivalent to 8% of the total assets of Iceland’s three big- gest banks.” NASDAQ’s recent economic in- dicators paint a very grim picture of things to come: - Actual inf lation has risen by 41%from January 2007 through September 2010 - Disposable incomes have dropped by over 20% last year - Wages have fallen by over 10% from 2007 to August 2010 - 63% of Iceland’s mortgages are on the brink of bankruptcy - 40% of homeowners are already ‘technically’ insolvent It appears then, that the only way to solve the mortgage crisis is for the Icelandic government to cover the losses. After all, you can’t have over 50% of the country on the street, can you? Yet, strangely, on October 12, an unnamed Icelandic finance ministry official told the AFP that, “We are weighing our options and debating whether we actually need the loan from the Nordic countries at the mo- ment.” So, everything is well under con- trol then? Dian L. Chu, a NASDAQ econo- mist, speculated that although the dramatic 60% plunge of the Icelan- dic króna has assisted Iceland in its exports, “Iceland [has essentially] been held together…by ‘technical de- faults’ and capital control…domestic inf lation, and asset devaluation, most likely will wipe out the entire middle class.” Eiríkur Bergmann Eiríksson, pol- itics professor at Bifröst University, was quoted this month in the Finan- cial Times in relation to the October 6 demonstration. He said, “Two years ago this week, the financial system collapsed. This week, we’ve found out that the political system has also col- lapsed.” “One of the results of the economic collapse in Iceland is a total lack of confidence in most institutions: the Parliament, the banks, the civil service.” MARC vINCENz páLL HILMARSSON

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