Reykjavík Grapevine - 05.07.2013, Blaðsíða 6

Reykjavík Grapevine - 05.07.2013, Blaðsíða 6
Words and photo by Shea Sweeney Iceland | News Of Horses And Indebted Men One horseman’s protest highlights the rocky debt relief road ahead... The horseman dismounted and led the horse up the stairs to the door of the Government Office’s, where he was hoping to find Iceland’s newly elected Prime Minister, the thirty-eight-year-old Sigmundur Davíð Gunnlaugsson. Following the horseman, a poker- faced man in a red sweater filmed the scene on a cell phone. The three of them—horseman, horse, and cameraman—crowded onto the stoop and the horse- man began to knock vigorously on the door. In the few minutes that he had planted himself there, the horseman, or more specifically, the horse, had drawn considerable attention. Tourists stopped to photo- graph and excitedly speculate. A British tour group clustered at the bottom of Laugavegur. “That’s the Prime Minister. He’s going out for a horseback ride,” said one of the women. Others in the group nodded and smiled. Then a police officer made his way to the door and took the reins of the horse while talking with the horseman. He stroked the horse’s face while three other cops came and escorted the horseman into the back of a police car. The horseman, Friðrik Helgason, and his horse, Hera, a seventeen-year-old mare had ridden 12 km from Kópavogur that morning, navigating side paths, morning car traffic, before arriving to the horse-less city centre. The purpose of his journey? To deliver a letter, a garden weeder, which he explained in the let- ter was for Sigmundur Davíð to get rid of the weeds getting in the way of him keeping his promises, and a pair of scissors, so that the new PM could cut himself free from the bank-controlled puppet strings attached to his back. Broadly, it was a demonstration to remind Sigmundur Davíð of his campaign promise to bring debt reduction to homeowners. Narrowly, it was, in Friðrik’s mind, a last resort. A sobering desperation I met with Friðrik at Café Paris a few days after watching him be put in the back of a police car. He wasn’t arrested, just questioned in the police car and released on location. After that, a transport service brought a cart for Hera and Friðrik rode along. He was a polite, middle-aged man who liked horses and the countryside, and spoke better English than he thought he did. He ordered black coffee. Like many Icelanders, he had intense blue eyes, but they were marked by a sobering desperation. “I have my horses, my small plot of land, and my motorcycle. That is what I have, and they want to take it away from me,” said Friðrik, who was laid off from his carpentry job in April of this year. In 2007, Friðrik and his wife bought an apartment in Kópa- vogur that cost 29 million ISK. They paid 8 million ISK and got a 21 million ISK loan from Arion banki. Friðrik expected that they would be able to pay off the 21 million ISK in five to six years, but the loan has now risen to 38 million ISK “because of infla- tion,” Friðrik said. “I required assistance from the Debtors’ Ombuds- man, but it seems the staff there isn’t working on my case on my behalf, but on the behalf of the creditors,” Friðrik wrote in his letter to the PM. In order the pay off the loan, the bank wants him to sell his eight horses, his land, and his motorcycle. He said it is very likely this would still leave him in debt. “Hera is a very good horse, she’s well bred, and worth a lot of money. There are people who want to buy her, but for a much less than she’s worth,” he said. The epidemic of homeowner’s debt in Iceland post-crash was due in part to the privatisation of the country’s largest banks in 2003. The privatised banks began to compete with the state-run Housing Financial Fund on the housing mortgage market. The banks, willing to lend to nearly anyone, offered 90 percent loans and also competed amongst each other for the lowest interest rates. There were instances when some banks gave 100 percent loans. Following the crash, it became clear that this was not a good idea, putting many in the position of not being able to make payments on their loan. Fur- thermore, because most mortgages are connected to the consumer price index, a rise in inflation means a rise in debt. “While rampant inflation would or- dinarily cause inflation linked mortgage payments to rise sharply, these loans have additionally been engineered with graduating payments and negative amortization schedules, leading to compounding in- terest accrual and in the long run exponential growth of monthly payments. The ever increasing costs in- evitably lead to a variety of economic calamities and human tragedy,” The Homes Association of Iceland explains on their site. Will Sigmundur stand by his word? Although Sigmundur Davíð was only elected Prime Minister at the end of April, Friðrik was not con- cerned that it was too early to push the new PM. “You who were elected to improve the situation, I encour- age you wholeheartedly to keep your promises, as soon as possible, because the nation is about to crack from the burden. The ordinary people are about to give up,” Friðrik wrote in his letter. Friðrik is not amongst those who voted for him, but is still urging him to keep his promise to reduce taxes and relieve debt. “He made a promise before he was elected, and I’m telling him to keep it. I don’t think he’s going to keep it” Friðrik said over the rumble of Café Paris. He realised he was nearly yelling and receded, sip- ping his coffee. In early June, Sigmundur Davíð announced his ten-step plan for debt relief, which sounds like the title of an exercise video or a self-help audiotape. “[It] includes preparation for general correction of debt, lowering the capital of indexed mortgages, the op- tion of establishing a special debt correction fund if financing is slow and the introduction of a so-called key law,” the PM said in his official speech to the public last month. And he’s paying for that with what money? He plans to do this by not paying back billions of ISK worth of assets owed to foreign creditors by Glitnir Bank, Kaupthing Bank, and Landsbanki Islands. So, as Friðrik asks for debt relief from Iceland, Iceland will ask for debt relief from the world, but there’s a lot of risk in telling foreign creditors that they won’t be getting their money back. “Iceland will be locking itself out of the international debt markets and reduc- ing the country’s chances of raising investments,” said Danske Bank chief of emerging markets econo- mist, Lars Christensen, in a statement for Bloomberg BusinessWeek. Nonetheless, Sigmundur has stated that he hopes negotiations regarding debt write-off from foreign lenders could begin this summer. The key law The part of the ten-step plan that caught Friðrik’s at- tention was the ‘key law.’ The basic premise of the ‘key law’ is that a homeowner who can’t pay off their housing loans has the option to turn over the keys to the lender and walk away debt-free. In Friðrik’s case, it sounds like a miracle. “All I want is to give them the key to the apartment and walk away, never to go back to the bank again. I already gave them 8 mil- lion ISK. So they can have that, and they can have the apartment,” he said. “That would leave me with my horses and my bike and my land.” As our conversation moved from the Icelandic government to horses, Friðrik lightened up. He’d been riding since he was nine and identified whole- heartedly as a horseman. He kept pointing at the laptop on the table and saying, “I don’t know how to use this. I’m just a horseman. I’m just a horseman,” he smiled. The day after we met, Friðrik and his wife were leaving Reykjavík on a 130km horseback ride to their twenty hectors of land in east Iceland. “We are going to go out into the country to enjoy the nature and fresh air,” Friðrik said. He sat back in his chair for a moment and watched people busy- ing themselves around the café. Friðrik told me the police took his letter and he didn’t think there was a chance it would make it to Sigmundur Davíð. “But I’m not angry at the police, the police are good peo- ple,” he said. He handed me an extra copy. The last sentence read: If you use these tools and stick to the restoration and the justice you promised to bring about, you could become a national hero, even world famous. With kindness and respect, Friðrik Helgason “You speak very clear Danish. It’s easy to understand.” – Prime Minister Sigmundur Davíð Gunnlaugsson to the Danish PM at a press meeting at Marienborg, Denmark on June 24. Yup, the Icelandic PM complimented the Danish PM, Helle Thorning-Schmidt, on her…Danish. She’s a born and bred Dane. The two Prime Ministers held a meeting at Marienborg, just outside Copenhagen, where the Danish PM has a summer residence. After the meeting the two of them stepped outside to talk to the Danish press, where Thorning-Schmidt answered questions in Danish and Sigmundur Davíð in English. That’s when he turned to his counterpart to express his admiration for her command of her native language. When former Prime Minister Jóhanna Sigurðardóttir first came to power in 2009, she was criticised—and mocked—by some for using an interpreter when meeting with foreign politicians. Her critics thought it was embar- rassing, even outrageous, to have a minister who couldn’t express herself well enough in another language. Obviously, they’d forgotten the confusion over who said what when Alistair Darling, then Britain’s Chancellor of Exchequer, and Árni M. Mathiesen, then Minister of Finance, had a phone conversation as the Icelandic banks collapsed in the fall of 2008. That conversation led the British government to use anti-terrorist legislation to freeze all Icelandic bank assets over there, so maybe using an interpreter would have been a good call? In any case, Sigmundur Davíð, who took office in May, obviously wanted to establish right away that the new PM is a man of many languages, making sure he wouldn’t be made fun of, though he might have been overcompen- sating just a tad, just a tad. “Why should he get special treatment?” – Minister of Finance and Chair of the Independence Party Bjarni Benediktsson to the Norwegian News Agency (NTB) on June 25. When meeting with other chairs of Nordic right-wing political parties, the Norwegian press used the opportunity to ask the minister about the case of whistle blower Edward Snowden. At that time, Snowden had declared that he wanted to seek political asylum in Iceland, and the WikiLeaks spokesman and other Snowden supporters were criticising Icelandic authorities for not responding to his plea. Bjarni told the Norwegian journalists that Snowden had not officially applied for an asylum in Iceland so there was no need to speculate about whether he would receive help from Iceland. When Snowden’s case was compared to that of chess genius Bobby Fischer, who was wanted by the USA for having travelled to Yugoslavia in 1992 to play chess and received Icelandic citizenship after being arrested in Japan, Bjarni said that Fischer’s case had been unique and couldn’t be compared to that of Snowden’s. If he wanted to seek asylum in Iceland, he would simply have to go the back of the line as many others before him who were still waiting for an answer to their asylum application. Reykjavík was overcast and cold the morning of June 24. The lacklustre clouds covered everything beyond Harpa but relentless tourists continued to stream through downtown, gathering in pods on the Ingólfstorg square and in front of the Government Offices. It was an average day at best, until a man on a small rust coloured horse appeared between the statues of Hannes Hafstein and King Christian IX of Denmark, his arm extended, handing over the Icelandic con- stitution—perpetually gripping a framework for freedom. As Friðrik asks for debt relief from Ice- land, Iceland will ask for debt relief from the world. “ „ by Ingibjörg Rósa BjörnsdóttirThey said what? 6The Reykjavík Grapevine Issue 9 — 2013
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