Heroin-economic detox

A small country with politicians mesmerised by dodgy financiers? Birgitta Jónsdóttir’s explanation of events in Iceland should be read closely by Scots

Iceland founded Althing, the national parliament, in 930, making it one of the oldest parliamentary institutions in the world. Icelanders were free until 1262 but then we were submitted under the Norwegian Monarchy that lasted until 1400, after that we were ruled by Denmark and full independence wasn’t our reality until 1944. In order to understand Icelandic politics one has to compare it to nations who have claimed freedom from colonists. In many ways Icelandic politics are still coloured by legislation and functions of the old Monarchy. Our constitution is basically a copy/paste of the Danish constitution and it had become redundant a long time ago. Iceland’s population consists of only 320,000 people. This of course means we are a clan-based society and that has resulted in nepotism of a high degree in politics. The nation finally realised last year that a separation of the three branches of government is a mere illusion. Iceland is a state of political party leaders. It is subject to the dictatorship of a handful of political leaders. The separation of the three branches of government is disregarded, Althing has no power whatsoever. It’s merely a processing and handling institution for the executive power (the cabinet) and the appointment of judges is subject to the whims of those in power.

The financial meltdown

As a result of the total financial meltdown, old demands of increased democratic reform has been rekindled with more fervour then ever before. The country had not seen a government without the Independence Party for 18 years straight. The Independence party gradually shifted into neoliberal policies and the Progressive Party gradually became so week that any chance of voice or reason was thwarted by what some consider as bribes, when it came to, for example the privatisation of the national banks a few years ago. As a result of the three banks collapsing, each earmarked to different political party, the Social Democrats, the Independence Party and the Progressive party, a wave of anger erupted and resulted in a revolution a few months later. No other country was hit as dramatically as Iceland when the global financial crises hit the world in 2008. The staggering debt has left the country hovering at the edge of debt moratorium. Going from being classified as the 5th richest country in the world to a debt moratorium is leaving little room for maintaining the same social structure as before. The nation is having to face either spending all its GDP in paying interest on foreign debt (in many cases originating from private debt rolled over to taxpayers) or claiming debt moratorium.

The public and the power of change

A left government has never ruled in Iceland, not until the pots and pans revolution in January 2009 drove the meltdown government from power. The Social Democrats were a part of that government but after the elections in April 2009 the Left Green Movement and a new political movement created shortly before the elections from a coalition of grassroots movements originated from the demand for social reform called the Civic Movement were considered the true winners of the election. The left parties could for the first time in Icelandic history form a majority government; and so they did. The name the government chose for itself was “Nordic welfare government”. That sounded like music to the ears of many Icelanders who had dreamed of living at times when left values were the core values of society. However it might have been a grave mistake for the SDA and LGM to take on running an economic program through the iron fist of the IMF, which indeed bases its program on everything but left values. It might have been a grave mistake to clean up the mess after the heroin economics practiced in Iceland for the last decade or so by the neoliberals of the Independence Party.

Is left really left?

The Social Democratic Alliance was created in the run-up to the parliamentary elections of 1999 as an alliance of the four left-wing parties that had existed in Iceland up till then: the Social Democratic Party, the People’s Alliance, the Women’s Alliance and the National Movement. The parties then formally merged in May 2000. The merger was a deliberate attempt to unify the entire centre left of Icelandic politics into one party capable of countering the right-wing Independence Party. The initial attempt failed however as a group of Althing representatives rejected the new party’s platform – which was inspired by that of Tony Blair’s New Labour Party – and broke away before the merger. They founded the Left-Green Movement, based on more traditional socialist values as well as environmental issues. Some MPs and Ministers from the Social Democratic Alliance have been heavily criticised for being more to the right then the neoliberals in the Independence Party. The Left Greens have been criticised for abandoning all its major pre-election promises, such as being opposed to the application for EU membership. However most of the Left Green MPs voted in favour of application last summer. The SDA said before elections that they were not willing to form a government with anyone unless they would support EU application. They also promised to help pave the way for more multinational heavy industry, mostly aluminium smelters for notorious corporations such as Rio Tinto. There has also been heavy criticism on this government for passing a budget that will erode many of the core values of the Icelandic welfare system, such as equality in health and education. The most banal poison pill this government decided to swallow was the Icesave bill, the way the left wing government handled this case of transferring private debt to the taxpayers of Iceland has been a total failure from day one. First of all they refused to accept assistance from foreign experts in handling contracts for nations in a similar situation as Iceland. They did nothing to bring attention to the fact that the IMF program was blocked by the UK and Dutch governments and other EU member states. The SD dream of being part of the EU family could be thwarted if they didn’t do as they were told at the dramatic ECOFIN meeting in November 2008. The £3.4 billion payout agreed upon to roll over to taxpayers is against the will of 70 per cent of the nation. Just the interests of Icesave will suck up income tax from 80.000 taxpayers in Iceland every year for at least seven years. It will place Iceland in the same position as developing nations who spend all their GDP paying interest of foreign debt typically created by dictators. The reason for this being such a hot potato in Iceland is that the government has still not made enough effort in freezing the assets of the people responsible for this unbearable debt. The people responsible are still living in luxury while we now have three per cent of the nation relaying on churches and independent welfare organisations to feed them. And it is only going to get a lot worse before it gets better. The Minister of Health Ogmundur Jonasson resigned recently because of the way his government handled the Icesave saga with, according to him, intolerable tendency to secrecy and emotional blackmail. The neoliberals are to blame for the mess in Iceland. All extremes in politics tend to have terrible results for the nations whom are naïve enough to elect that sort of power to govern their social structure. Perhaps is really time for those that claim to be left parties in Iceland to have a long hard look at what is really left of the left wing politics in their parties. The trend for confusion as to what is left wing policies within the Social Democratic Alliance is contributed largely by seeking inspiration from the British Labour Party during the era of Blair. It created a deep impact on left policies and politics in Iceland. The opinion of many people is that the Blair leftism has very little to do with left wing policies. Perhaps now is the time in Iceland to look beyond traditional political lines and seek some sort of consensus on what all parties need to work together towards in order to pull us out the mess we are in.

Iceland politics in major political crises

One of the nosiest cries for change during the times of the revolution in January 2009 were for social reform such as the possibility for the general public to call for national referendum. Another one was to be able to vote in a similar fashion as they vote in Ireland, a single transferable voting system. The nation also wants to have a general constitutional convention for the people not the politicians. All the parties promised pre-election to listen to these demands yet all of the bills proposed by the government are still collecting dust in committees. There is turmoil in all the political parties; power struggles have made their mark on all the parties. The Left Green Party in on the verge of loosing some its key MPs if they carry on sacrificing their ideals and policy in order to hold on to power. There are two towers battling for idealistic power within the party and today it doesn’t look like they will be able to keep it together for much longer. All this political turmoil is quite natural in a total meltdown and crises like the island is going through. There will be without doubt a few new government coalitions before the dust has settled. The financial meltdown was much more then just a financial shock for the island nation. It revealed in a shocking way deep rooted problems of nepotism and the weakness of parliament.

What next?

As I am writing this article historical events have been unfolding yet again on the island. The Icelandic President Olafur Ragnar Grimsson chose to listen to the 23 per cent of the nation who signed a petition calling on him to put the state guarantee for £3.4 billion to be paid to the British and Dutch governments to a national referendum. The bill was passed through the parliament with a narrow vote on December 30, 2009 after months of acrimonious debate, tainted with secrecy and dishonesty on the part of the government. Every day throughout the debate, new controversial information would emerge and documents would leak on a regular basis to local media or wikileaks. Finally the people of Iceland has a chance to have something to say about their fate. On January 5th 2010 the Icelandic president had the courage, backed up by his nation, to place the interest of the people before that of the banks.

On 1st of February the report from a Special Investigation Commission established by the Icelandic Parliament will be published. The Commission’s mandate has been to seek the truth relating to the events leading to, and the causes of, the downfall of the Icelandic banks, and related events. The head of the committee said to the press last August that no other committee in our history would have to bring the nation as bad news as the committee he chairs. Speculation is that many political leaders and politicians from all parties will have to face the blues except the Left Greens and the Movement. This could mean that there would have to be general elections again this year. Many fear that the Independence Party will regain its strength on the political arena – they are already gaining following in polls. One thing is for sure – these are interesting times in Iceland, politically and socially. The nation seems to be awakening to its responsibility of co-creating the social structure it wants to live in. The nation has been forced to rethink its values and morals, consumerism is no longer the core value. However, values of self sustainability, family and compassion are emerging as the cornerstones in our society.