Do you remember that old joke…
Back in autumn 2008 the joke used be that the only difference between Ireland and Iceland was one letter and six months, but that joke is now on us. The economic experts who predicted doom for Iceland and salvation for Ireland by following their very differen courses, have proved catastrophically wrong.
This morning we heard from the World Economic Forum in Davos, RTE correspondent Tony Connelly told us:
Soros: Ireland got a very raw deal in the euro crisis, compared to Ireland, Iceland is flourishing
Related RTE news article: Ireland got raw deal over debt – Soros
And in greater detail on Irish Times: ‘Raw deal’ for Ireland on debt
Speaking on RTÉ Radio One, Mr Soros said Iceland had fared better with its banking troubles.
“If you compare the fate of Ireland with the fate of Iceland, Iceland is actually flourishing, although it had a bigger banking crisis than ireland in relation to its population, because it simply did not accept the liabilities of the banks,” he said
Now nearly 5 years on and it turns out that Ireland has much to learn from Iceland. Infact in recent weeks there has been some discussion on Irish media about just that. The following post explores what did, and did NOT, happen in both countries…
Iceland: People Start Revolting In iceland: Summary Of Action News In English | Former PM of iceland Might Face Trial Over 3 Banks Failure | 2008–2012 Icelandic financial crisis (wikipedia) | Guardian: Iceland ex-PM Geir Haarde cleared of bank negligence | Banks as bad as ever; insurers and Iceland in surprisingly good form | Iceland starts to recover its voice after financial crisis | Iceland brought in from the cold thanks to party of punks and pop stars More: inspiredbyiceland
Irelands response: The Unfolding Crisis and Ireland’s Economic Ruin | A History of Iniquity, I: The EU & Eurozone Assault on National Democracy | A History of Iniquity, I: The EU & Eurozone Assault on National Democracy | Farmers group wants Ireland to follow iceland and burn the bondholders | The Bank Bail-Out Is Costing Us Far Too Much | #OccupyIreland, 6 camps and building… Dublin, Cork, Galway, Belfast, Waterford…Letterkenny.. | J19: ‘Indignants’ to protest EU Pact in Dublin, Cork, Galway and Limerick | Ireland still has the option of burning bondholders (Sinn Fein) | Address to European Parliament President: We want our money back (Stephen Donnelly, Independent TD) | That Joke: Dan White: The economic return of Iceland has proved that the joke was on us
A few weeks ago on RTE`s John Murray show there was the following piece:
The interview appeared after his article some time previous in the Irish Times: Blowing hot and cold in Iceland
I thought I was coming to a land of sheep farmers and fishermen to see what Ireland was once like, instead I see what we could yet be if we choose to shift our focus from England and America’s end-of-empire despair to our island’s true potential.
Putting the Irish debt crisis into perspective:
Deputy Stephen Donnelly, Address to European Parliament President: We want our money back, Oct 5, 2012
During a recent conversation I had with a German economist he pointed out to me that the German translation of “debt” is the same as that for “guilt”, which I found interesting.
The following tells an interesting story. Ireland will borrow €67 billion from the troika. To date, Ireland has poured €64 billion into failed banks, which, in my opinion, should never have been given a penny. This €64 billion is the equivalent of the German people being asked to put one trillion dollars into a failed banking system. When, during a recent interview for a documentary exploring this issue, I put this to a German journalist his response was, “There would be revolution”.
So what did Iceland do right?
First of all some people got angry and did something about it; Public revolt. Then they didnt bail out the banks, they re-wrote their constitution, they put corrupt politicians into jail… Since then things have greatly improved for them. Their system is nowhere near perfect, but collectively they are on a road that Ireland could well do to take lessons from…
From the excellent blogpost, An Indispensable One:
We all know the smug joke for finance traders and their fans that goes “What’s the difference between Iceland and Ireland?” But what is the difference between Ireland and Iceland?
Here’s one: Iceland’s former prime minister, the one who was in charge of the government at the time of the banking sector collapse, was formally charged with criminal negligence for his failure to manage the crisis adequately. Here’s another: Iceland has had two referenda on public repayment of private bank debt, with the majority of voters saying ‘No’ each time. Here’s another: Iceland ‘has largely recovered from its deep slump‘. Clearly there is more to this than a letter and 6 months.
I was reading a profile in Público today by Juan Carlos Monedero of Hördur Torfason, one of the principal protagonists of Iceland’s financial crisis protests, and the first thing I thought was, I have never heard of this person, even though he sounds important…
In May 2011 a public revolt started in Spain, which still might spread further, here is a message from Hordur Torfason to the people of Spain at start of the #spanishrevolution
Hello people of Spain. My name is Hörður Torfason (Hordur Torfason).I am standing in front of the parliament building in Iceland, in Reykjavik, the capital.In October the 11th 2008, I came down here and started asking people were passing by “what has happened in Iceland? what is happening? what can we do?”And I stood here everyday for a week.At 12 o’clock I came down here and I asked people to meet up, and I asked the parliament members who passed by. I am not a politician I am an artist who has been fighting using my talents to fight for human rights for more than 40 years. And I considered the situation in Iceland, in 2008, the financial crash, a human right issue. So, a week later, I had hired a big car and sound equipment and I started weekly demonstration meetings here to analyse the situation and ask the government to step down, because they had failed their duties.And to me, and most people, we saw through the corruption. And now 2 years have passed by, and we have had news of corruption almost everyday. Now, to do a demonstration what I really emphasised in the meetings, in the beginning of every meeting, was that we do this peacefully, no violence. Because if we use violence, the politicians, the government will use force, they will use the police, in your case, I think, even armed. This took continuously a lot work doing this, it took 5 months, but it succeeded one hundred percent. We haven’t finished, because changing the society takes decades, we are always changing our societies. But I challenged everyone here in Iceland, I asked to use the pots the pans, our stories, our songs, make it peaceful make it joyful protests. That’s the way. And take care of each other, Became friends, sharing your worries, be together, stick together. Because politicians see a group of people, they look at 10000 people and they think this people are 10000 votes, this is our way of making that understand. We select you to the parliament to be our servants, you are not our masters. We are the people, we decide, and we don’t like to be cheated, or lied to. We want changes and we want honesty, is that too much to ask for? No, it’s not. We want a society where everyone is included, not just few rich people. People of Spain, thank you, good luck with your protests. Bye from Iceland for now anyway.
The Public Revolt
A Capitalist doll was hung at a recent protest in Iceland
Icelandic protests against the govt
banks and the crisis:
- Al Jazeera: Counting the Cost, Lessons from Iceland
It has been three years since the Iceland’s banking system collapsed, which may have been the best thing that could have happened for the country.
Iceland was the first nation to fall victim to the 2008 credit crunch. It also became the first Western European nation to get a bailout from the International Monetary Fund (IMF) in more than three decades.
The nation’s three largest banks went on a $100bn spending spree, financing international acqusistions and construction projects. The money spent was more than seven times the nations GDP of $14 bn.
There was a big overspend which got Iceland into trouble, and as a result the banks were nationalised, while the economy and currency, the krona, essentially collapsed.
But rather than bailing out the banks, lawmakers were pursuaded by public revolt not to takeover the debts of the banks.
- The Viking Way: Iceland’s alternative path out of crisis (documentary)
In 2008, Iceland was confronted with an unprecedented economic disaster. The country’s three banks collapsed, dragging with them to ruin the country’s whole social, economic and political life.
Four years later, in 2012, Iceland has begun to show signs of recovery. Unemployment rates are declining and growth rates have reached approximately a 2,5%. However, in order to reach this positive outcome, some quite unorthodox methods were implemented. The measures taken were completely different from what the E.U. and the IMF enforce on member states of the Euro zone that suffer from the effects of the recession. Many times, these handlings brought Iceland up against the International Community and the markets. Nowadays, even the IMF admits that the different methods used in handling the crisis in Iceland have come into fruition. How did the Vikings’ descendants achieve these results?
Iceland’s biggest city, Reykjavik, now has perhaps the most colorful mayor in the world, a comedian, punk, Banksy fan…
Jon Gnarr (born January 2, 1967) is the current mayor of Iceland’s biggest city, Reykjavik. It’s the northernmost capital in the world and the heart of Iceland’s economic and governmental activity. Here are 12 Reasons Why Jon Gnarr is the Most Interesting Mayor in the World
Related vid: Gnarr
Image from Todos Somos Islandia (We are all Iceland), the public revolt spreads…
For a small country, they make some great music…
Sigur Rós – Starálfur, Álafoss
Sigur Rós – Heima
And in summing up..
I was reading a profile in Público today by Juan Carlos Monedero (whose book La transición contada a nuestros padres, let me say once again, is a must for hispanophone readers) of Hördur Torfason, one of the principal protagonists of Iceland’s financial crisis protests, and the first thing I thought was, I have never heard of this person, even though he sounds important.
The 15-M of Hördur Torfason: from Iceland to the Puerta del Sol
Hördur Torfason has arrived in Spain, and after conversing with the many people who have been part of the 15 M movement he exclaims: “how organized you are!” The figurehead of the “Icelandic revolution” lives in a country of 330,000 inhabitants. In the same way as some people speak in verse without knowing, Icelanders are organised so as not to be scattered throughout the island if ever they need meet up. Here, the Puerta del Sol had to be reinvented as a popular parliament. When you’re surrounded by water everywhere, things are simpler.
In October of 2008, when Torfason figured that his government was taking him for a fool (he listened to, but didn’t understand, the Prime Minister speaking of tightening one’s belt, from a hairdresser’s) [there is a pun here in the original that I can’t be bothered to try translating – basically ‘tomar el pelo’ means to mock or to take for a fool, but literally translates as ‘take one’s hair' - HG], the first thing that occurred to him was to get into contact with his neighbours. At least 300,000 of them. In the streets, in the towns, doing theatre or playing guitar. People had to be spoken to and listened to. The “great conversation”, as Jesús Ibáñez says of revolutions, began to travel from mouth to mouth. Those who do violence hold monologues. Those who do violence do monologues. Those who do respect do dialogue. And it is by talking that you revolutionise people. In 2008, Iceland, which just a year previous had led the world in the Human Development Index, saw its three main banks – Kaupthing, Landsbanki and Glitnir- go bankrupt. Meanwhile, their managers and owners lived outside the country living it up on owed money. And those who had to give it back –with interest- were the ordinary Icelanders. All that remained was to give shape to the outrage. Hördur Torfason confronted political power and the country understood.
Brought up in traditional ways (he was born in 1945), he decided to protest in front of the Parliament. Peacefully, with an old frying pan and a wooden spoon to make noise. A few friends joined him the odd time. But if he had to be there on his own (as one of the ‘indispensables’), that wasn’t a problem, as Brecht had said there were no shortage of people who struggle for a day and spend the rest of their lives recalling it. One day when it was no doubt raining, one of the ministers told a police officer who was outside the chamber that the gentleman making a racket should not be there. When they transmitted to him the invitation to leave, they only managed to anger more people. It’s always your enemies the ones who build you. When they poke a finger in your eye for the sake of it, your reasons multiply. He insisted he wanted to speak to the politicians responsible. What do you mean I can’t speak to my minister? Is he not mine too? Aren’t we the ones who pay them? Since the ministers would not receive him, he placed candles on the ground. One for each minister. And he spoke to the candles. We live in a world that is audiovisually saturated, and good moves slip through from the eyes to the heart.
Social movements have three elements that lend them success: leadership, proposals and structure. Hördur the figurehead, besides being extroverted –he is an actor and singer-, was stubborn, which is to say, perservering. He was one of the first famous people to publicly declare their homosexuality in Iceland. He underwent the ordeal of going from having fame and money to being stigmatized, losing his followers and, finally, becoming an exile. Convictions tend to come at a high price. But they never broke his will. What doesn’t kill you makes you stronger. He returned after some time to his country. Full of consciousness. And just as he did not keep quiet about his sexual orientation, he did not do so when the government deported a political refugee from Ghana. This is where he learned to stand in front of the gates of the government and protest. He had already decided not to be muzzled.
With these personal virtues, the question of leadership for the Icelandic revolution was solved. The structure wasn’t complicated either. If they squeeze up, every Icelander will fit in one square and its surroundings. Moreover, young people told Hördur about the internet. And that was like an immediate public square. A public square, furthermore, that got round the fact that the broad mass of communications media are in the service of some powerful interest. Oh look, they’re telling lies. And two thirds of Icelanders are on Facebook! Problem solved. Now it was important to find proposals.
Three came to the fore as urgent: resignation of the government, resignation of the heads of the Financial Supervision Authority and the resignation of the board of directors of the National Bank. The most difficult was the third one. The heads of central banks cling like barnacles to their post. Previously, they are always directors of other banks, and the pattern makes them see their job like a vital organ. And who is going to consent to their own sacking, hand on heart? But since the conversation that the Icelanders had set in gear was very fluid, they achieved all their objectives, and even the President of the Central Bank finally had to tender his resignation. New ones came along, but it seems the movement had read El Roto (Spanish cartoonist and satirist) when he said: if you pull down the statues, don’t forget to pull down the plinths too so others don’t take their place. New appointments came along but popular oversight did not cease.
In any case, things did not stop there. Who was responsible for the crisis? Here things got complicated. Who the hell understands juridical rigmarole? They hired a journalist who was an expert on corruption to drag up the people responsible for the crisis. Until they arrived, for instance, to certain conclusions that allowed for the imprisonment of those who bought banks with money loaned by other banks. And to denounce the auditing firms, who had been equally responsible for lying.
The level of citizen commitment was transmitted into the new Parliament that came out of the new elections called on account of the new situation. When politicians feel supervised by the voters, they work better. The eye of the owner fattens the herd. Finally, they ended up imprisoning certain bankers.
2008 was the Icelandic annus horribilis. The three main banks had collapsed, and were nationalised; the stock market had lost more than 76% of its value; private debts were suffocating the payers –who had coaxed along by sticking cheques in their pocket (“Don’t worry about paying now. It pays itself”)-; an onerous loan from the IMF was going to introduce Icelanders to the adjustment plans well known previously in Latin America and Africa. In the end, to save the financial system, each Icelander had to be in a position to pay immediately an average of €60,000. The debt was four times bigger than the GDP of Iceland. Although in April of 2009 a new government was formed (with social democrats and environmentalists), international pressures made dents. The government of Iceland decided to make pacts with the creditor countries, the UK and Holland. But President Ólafur Ragnar Grímsson decided not to accept this agreement. As ought to be the sensible thing in democracy, he called a referendum – the 7th of March 2010- on the payment of debt to foreign banks responsible for the bubble. After ten years where the banks had enjoyed a free bar, it was time to lay down a little order. The neoliberal party always finishes with an infernal hangover. And the referendum voters decided that legitimate debt had to be paid, but not illegitimate debt. Banks are businesses, and if it goes bad for them, the citizenry has no reason to rescue them (do they rescue clothes shops that fail?). The financial system counter-attacked and said that Iceland was a ‘terrorist state’. To get in the way of bankers is tantamount to flying a plane into the twin towers. A second referendum insisted: we are only going to pay what is fair. It is the banks who have had to adapt to the demands of the people. “If you squeeze us too much, we won’t pay you”. And what seemed impossible became possible. Even the former Prime Minister, the conservative Haarde, was charged, accused in April 2011 with “extreme negligence” and with hiding information about the gravity of the crisis. Jailing the bankers, prosecuting the liars, putting politicians in the dock for their negligence. It sounds like revolution.
Aware that without information there can be no democracy, in Iceland they have set in gear the “Modern Iceland Initiative for Communications Media”, which seeks to protect the freedom of expression for citizens (not for media companies). It is already known that journalism of investigation is often journalism of investigation. In order for journalists to be able to investigate, it is necessary to protect sources and secure internet servers. If we have to find things out via Wikileaks, Wikileaks should not be hounded. To close the cycle, they decided to set in gear a new constitution. 522 citizens, with the personal guarantee of 30 signatures, presented themselves as volunteers to edit a new constitutional project. 25 people were chosen, who via an assembly process, submit articles to discussion, receive proposals and build a truly democratic constitutional project. A constitutional process from top to bottom. How different from the Spanish Constitution of 1978, written in secret, agreed in secret and voted having kept hidden from the citizenry the truly important discussions. Of course it was essential to exit Francoism. But the utopian energies of the era could have brought greater commitment. Precisely what the Icelanders are doing. This is what Hordur has come to Spain to share. Their revolution underway and the Spanish one yet to be known.
The stubborn figurehead of the Icelandic revolution has contrasted the 15-M movement with the experience in his country. He knows that they are different, but there are similarities. To look in a mirror elsewhere always gives a clearer reflection. Conclusions – first, in Iceland as in Spain, the ignorance of the movement is its wisdom. Thanks to the fact that they didn’t know about politics, they said no to those who said there was alternative.’ They didn’t know it was impossible,’ read the poster in the Puerta del Sol, ‘they went off and did it’. The sophisticated political and juridical arguments were a language unable to bewitch those who were profane. They knew that the politicians, the media, the banks, were all lying to them. They didn’t want any more justifications. Hordur, with his stubbornness in front of the Parliament, was an abuela de mayo, a padre coraje who didn’t want excuses, but commitments.
Secondly, the movement needs clear and concrete proposals that help people to articulate things. Once the “great conversation” has been achieved (where it is essential that everyone feels part of the discussion in conditions of equality), the moment arrives to define what is wanted and how it is going to be achieved. At some point, the broad mass of the movement has to do study. And for this, the assemblies are important. Because either the citizenry knows what it is talking about, or old and new “representatives” are going to do it for them.
Thirdly, the setting in gear of a constitutional process gives the movement a plural leadership (that of each assembly that discusses the constitution) and a different representation (subject to revocation, permanently connected to the grassroots) that is based on mutual responsibility and the learning of the rights and obligations of citizens. Courage for each and every one to be leaders (nodes in an enormous network that tenses up each time in a particular place to then recover its horizontal character); perseverance to neither have fear nor to give in to tiredness. Lucidity to establish radical proposals with one’s feet on the ground. Determination to demand a Transition 3.0 that will bring us a Constitution made by the people for the people.
“They insulted me, they harassed me, they ignored me, they attacked me, they abandoned me. But I never stopped being convinced that I was right, I never doubted that my peaceful method was going to have profound results”. Horder Tarfason has not come to Spain to leave us a brainy manual for theoretical revolutionaries. He has come to say to us: we believed it and we are doing it. Peoples never wait for intellectuals to carry out their revolutions. The 15-M summed it up frankly: ‘we aren’t knocking at the door: we’re knocking it down’.