Reykjavík Grapevine - 05.07.2013, Page 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