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Forum Post: Why Iceland Should Be in the News, But Is Not

Posted 12 years ago on Dec. 29, 2011, 3 a.m. EST by metapolitik (1110)
This content is user submitted and not an official statement

Why Iceland Should Be in the News, But Is Not

By Deena Stryker

An Italian radio program's story about Iceland’s on-going revolution is a stunning example of how little our media tells us about the rest of the world. Americans may remember that at the start of the 2008 financial crisis, Iceland literally went bankrupt. The reasons were mentioned only in passing, and since then, this little-known member of the European Union fell back into oblivion.

As one European country after another fails or risks failing, imperiling the Euro, with repercussions for the entire world, the last thing the powers that be want is for Iceland to become an example. Here's why:

Five years of a pure neo-liberal regime had made Iceland, (population 320 thousand, no army), one of the richest countries in the world. In 2003 all the country’s banks were privatized, and in an effort to attract foreign investors, they offered on-line banking whose minimal costs allowed them to offer relatively high rates of return. The accounts, called IceSave, attracted many English and Dutch small investors. But as investments grew, so did the banks’ foreign debt. In 2003 Iceland’s debt was equal to 200 times its GNP, but in 2007, it was 900 percent. The 2008 world financial crisis was the coup de grace. The three main Icelandic banks, Landbanki, Kapthing and Glitnir, went belly up and were nationalized, while the Kroner lost 85% of its value with respect to the Euro. At the end of the year Iceland declared bankruptcy.

Contrary to what could be expected, the crisis resulted in Icelanders recovering their sovereign rights, through a process of direct participatory democracy that eventually led to a new Constitution. But only after much pain.

Geir Haarde, the Prime Minister of a Social Democratic coalition government, negotiated a two million one hundred thousand dollar loan, to which the Nordic countries added another two and a half million. But the foreign financial community pressured Iceland to impose drastic measures. The FMI and the European Union wanted to take over its debt, claiming this was the only way for the country to pay back Holland and Great Britain, who had promised to reimburse their citizens.

Protests and riots continued, eventually forcing the government to resign. Elections were brought forward to April 2009, resulting in a left-wing coalition which condemned the neoliberal economic system, but immediately gave in to its demands that Iceland pay off a total of three and a half million Euros. This required each Icelandic citizen to pay 100 Euros a month (or about $130) for fifteen years, at 5.5% interest, to pay off a debt incurred by private parties vis a vis other private parties. It was the straw that broke the reindeer’s back.

What happened next was extraordinary. The belief that citizens had to pay for the mistakes of a financial monopoly, that an entire nation must be taxed to pay off private debts was shattered, transforming the relationship between citizens and their political institutions and eventually driving Iceland’s leaders to the side of their constituents. The Head of State, Olafur Ragnar Grimsson, refused to ratify the law that would have made Iceland’s citizens responsible for its bankers’ debts, and accepted calls for a referendum.

Of course the international community only increased the pressure on Iceland. Great Britain and Holland threatened dire reprisals that would isolate the country. As Icelanders went to vote, foreign bankers threatened to block any aid from the IMF. The British government threatened to freeze Icelander savings and checking accounts. As Grimsson said: “We were told that if we refused the international community’s conditions, we would become the Cuba of the North. But if we had accepted, we would have become the Haiti of the North.” (How many times have I written that when Cubans see the dire state of their neighbor, Haiti, they count themselves lucky.)

In the March 2010 referendum, 93% voted against repayment of the debt. The IMF immediately froze its loan. But the revolution (though not televised in the United States), would not be intimidated. With the support of a furious citizenry, the government launched civil and penal investigations into those responsible for the financial crisis. Interpol put out an international arrest warrant for the ex-president of Kaupthing, Sigurdur Einarsson, as the other bankers implicated in the crash fled the country.

But Icelanders didn't stop there: they decided to draft a new constitution that would free the country from the exaggerated power of international finance and virtual money. (The one in use had been written when Iceland gained its independence from Denmark, in 1918, the only difference with the Danish constitution being that the word ‘president’ replaced the word ‘king’.)

To write the new constitution, the people of Iceland elected twenty-five citizens from among 522 adults not belonging to any political party but recommended by at least thirty citizens. This document was not the work of a handful of politicians, but was written on the internet. The constituent’s meetings are streamed on-line, and citizens can send their comments and suggestions, witnessing the document as it takes shape. The constitution that eventually emerges from this participatory democratic process will be submitted to parliament for approval after the next elections.

Some readers will remember that Iceland’s ninth century agrarian collapse was featured in Jared Diamond’s book by the same name. Today, that country is recovering from its financial collapse in ways just the opposite of those generally considered unavoidable, as confirmed yesterday by the new head of the IMF, Christine Lagarde to Fareed Zakaria. The people of Greece have been told that the privatization of their public sector is the only solution. And those of Italy, Spain and Portugal are facing the same threat.

They should look to Iceland. Refusing to bow to foreign interests, that small country stated loud and clear that the people are sovereign.

That’s why it is not in the news anymore.

Stryker is an American writer that has lived in six different countries, is fluent in four languages and a published writer in three. She looks at the big picture from a systems and spiritual point of view.




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[-] 2 points by shadz66 (19985) 12 years ago

Further to this important 'forum-post', please also see :

a) "Key Lesson from Iceland Crisis is 'Let Banks Fail', by Haukur Holm ; http://www.informationclearinghouse.info/article29653.htm ,

b) "Iceland Declares Independence from International Banks", by Bill Wilson ; http://www.informationclearinghouse.info/article28391.htm ,

c) Max Keiser talking to Jon Thorisson (3rd Dec.'11), about the new 'Eva Joly Institute' and Iceland’s ongoing fight for justice : http://www.youtube.com/watch?v=DzaDRyAH3NI ,

d) Max Keiser interviewing Birgitta Jonsdottir (1st Nov.'11), about the true state of transparency, banking & economy in the latest IMF 'poster child', Iceland : http://www.youtube.com/watch?v=LfFu9cnaxR4 &

e) A top tune and some sage advice by another ever-independent Icelander : "Declare Independence", by Bjork ; http://www.youtube.com/watch?v=RPRUsHXEn_k&feature=related !!!

radix malorum est cupiditas ...

[-] 1 points by RedJazz43 (2757) 12 years ago

This particular article has been going around the net for weeks. Are there any more current reports?

[-] 1 points by nomdeguerre (1775) from Brooklyn, NY 12 years ago

Of course, it's hardly reported, the corpoRAT press is interlinked with the banksters. Newsflash to jobcreat, the media ain't liberal -- don't watch too much Fox "news", it lowers the IQ.

"Who Owns The Media? The 6 Monolithic Corporations That Control Almost Everything We Watch, Hear And Read" http://www.blacklistednews.com/Who_Owns_The_Media%3F_The_6_Monolithic_Corporations_That_Control_Almost_Everything_We_Watch%2C_Hear_And_Read/17341/0/38/38/Y/M.html

[-] 1 points by jobcreationdotus (1) 12 years ago

Deafeat all socialism, and stop promoting only the pretty faces from pretty places. If any media is responsible for censorship it is the liberal media. We were on the road for Job Creation in 2010 and no one would cover the story. The media is clearly working with an agenda, that is why we created nujobi.com, Shame on all of America for letting this happen. But we will fight back and bring balance.

Mark Nejmeh www.jobcreation.us

[-] 1 points by metapolitik (1110) 12 years ago

Defeat all capitalism! Stop promoting only the pretty capitalist faces from pretty capitalist places. If any media is responsible for censorship it is the corporate controlled media. 2010 was 2 years ago. If "we" were on the road for "Job Creation" in 2010, what the hell happened?! The media is clearly working with an agenda to discredit occupiers, that is why we created Metapolitik. Shame on all of America for letting this happen. But we will fight back and bring balance.


[-] 1 points by Nevada1 (5843) 12 years ago

Hi metapolitik, Good post. Thank you for your efforts. Best Regards, Nevada

[-] 1 points by FawkesNews (1290) 12 years ago

What a great idea. Democratic process should come to America.

[-] 1 points by flip (7101) 12 years ago

i read this in august on znet - very good article and evidence of what can be done if democracy is forced on the rulers - are greece and italy the next ones to rise up? nice job!

[-] 1 points by AFarewellToKings (1486) 12 years ago

Yes a modern farewell to kings. Most Americans continue to bow in fear and OWS, specifically the NYCGA, fails to make the call:

The events above noted gave unmistakable evidence of the unity of American sentiment against British oppression; but something more must be done to bring about united action. There must be some central authority to which all the colonies could turn for guidance. This political union came about in the formation of a Continental Congress. This Congress was the result of a spontaneous and almost simultaneous movement throughout the country. From New York came the first call.

Paul Revere had been sent from Boston on a fleet horse to rouse the people of New York and Philadelphia, but ere he reached the former the Sons of Liberty had taken action for a congress. The Massachusetts legislature added its voice in June. Delegates were chosen in all the colonies except Georgia, and they met in Carpenter's Hall, Philadelphia. Among them we find such leaders as Washington, Lee, and Henry of Virginia, Dickinson of Pennsylvania, Samuel and John Adams of Massachusetts, Roger Sherman of Connecticut.

The Congress was not a constitutional body; many of its members had been chosen irregularly. Its authority was limited to the willingness of the people to respect and obey its suggestions and mandates. The very fact of its existence had a meaning of great significance, but it was too profound for the comprehension of George III. It was less a congress than a national committee, an advisory council of continental magnitude. It attempted no national legislation.


[-] 1 points by infonomics (393) 12 years ago

Excerpt from above: This document [the new constitution] was not the work of a handful of politicians, but was written on the internet. The constituent’s meetings are streamed on-line, and citizens can send their comments and suggestions, witnessing the document as it takes shape.

If Iceland can implement this kind of participatory democracy with success, why can't the U. S. ?

[-] 1 points by libertarianincle (312) from Cleveland, OH 12 years ago

What do you think the racial and cultural homogeneity of Iceland is compared to the US?

[-] 1 points by metapolitik (1110) 12 years ago


As is evidenced by the following article regarding Finnish education:


[-] 1 points by sato (148) 12 years ago

I have a Finnish gf that studies in Helsinki's SYK, one of their most prestigious schools. Honestly, Finland education is overhyped. She gets perfect 10s doing homework late or not delivering it at all, doing tests without studying and doing all kinds of thinks that got me Cs in high school. Now, the only think I admire is that everything is free of tuition. I tried to apply for a university in Helsinki and they only charge student union fees. Other than that, I completed college out of debt with good grades and a lot of effort. I believe once Khan Academy and OCW catch on, American education will reach a higher level of performance as well as lower costs.

Also, as he points out USA isn't like any other country in the world. You are dealing with Mexicans that speak Spanish and are having trouble with English, Cubans, South Americans in general, and people with all kinds of backgrounds. Finland is comparable to a state. USA is a much larger and heterogeneous nation. In Finland you have only Finns and some exchange foreigners. However, Finns learn 4-5 languages, so they edge us on that too. But Finnish classes are in English or Finnish. Languages the students understand foreign or local. You need to apply to an English test if you are a foreigner that doesn't speak English as a native language. We should also enforce that, not to bar Mexicans and that people, but to make them learn English first and make sure they can succeed.


[-] 1 points by metapolitik (1110) 12 years ago

Apparently NATO doesn't drop bombs on the rich, white, or tech-savvy.

[-] 0 points by ubercaput (175) from New York City, NY 12 years ago

So that is how a tax haven should be punished. Icelanders took advantage, now they have to take the consequences. The neoliberalist whore finds a new partner.


[-] 0 points by ZenDogTroll (13032) from South Burlington, VT 12 years ago

I would like to see the entire process that has taken place in Iceland turned into a documentary, illustrating very clearly how they came to bankruptcy, the forces that attempted to impose a solution, and its resolution.

I think it would be highly instructive - and perhaps transformational.

[-] 0 points by ZenDogTroll (13032) from South Burlington, VT 12 years ago

God Bless the Icelanders!

I hope this process spreads through out the EU!

death to imperial economic fascism!!

[-] 0 points by Renaye (522) 12 years ago

I read somewhere that Ireland told the bankers to take a flying leap as well. Could that be why we don't see any headlines about Ireland lately? Enda Kenny is one straight up brilliant and thoughtful man. If there were more leaders like him, we wouldn't be in this mess.

[-] 1 points by Danaan (96) 12 years ago

Forget enda kenny he is yet another big fraud. Ireland is giving away all the savings, 10 years worth of pensions etc, to unsecured bondholders of a bank that went bust a year ago. One of the elitists in Ireland had bought up a huge stack of bonds last year knowing that this would happen.

[-] 0 points by economicallydiscardedcitizen (761) 12 years ago

http://www.youtube.com/user/bjorkdotcom?blend=1&ob=4 Björk on YouTube www.bjork.com

Since 2008 I've been saving many articles and other information covering the economic crisis in the US and abroad. Iceland had my attention and I followed the story online. As an American, watching the developments in Iceland and knowing that as an American looking to our US Constitution, Bill of Rights and Federalist Papers I already have the rights to act as the Icelanders did although to effect a major change nowadays OWS is at the beginnings of what could be a new revolution beginning with Americans taking stock in our founding documents and following through with ridding the corruption in government and Wall Street and pushing to get the US off of and out of the fractional reserve banking system that has the world in its grip-the planned push, pull synergy between governments, economies and multinational Wall Street companies has got to have an end point before more and more wake up to the fact that they will need to do as Iceland has done. Add to that, the US needs to bring back its industries here, quit meddling in other countries' business and return to the industrial and economic powerhouse it once was.

Here's a cut and paste from an email newsletter during the time of Iceland's riots:

The Sovereign Society Offshore A-Letter Saturday, January 9, 2010

Iceland: Damned if they Do…

By Matt Collins

Dear A-Letter Reader,

“I wouldn’t touch Iceland with a barge pole right now.”

Yesterday morning, we interrupted the festivities at Jyske Global Asset Management to sneak in a few words with Thomas Fisher, their Sr. Vice President and a member of our Council of Experts.

In case you haven’t been keeping up, the world’s pre-eminent basket case economy is facing a whole host of new problems…

In the year’s leading up to Iceland’s collapse, some of the nation’s largest banks made a last-ditch effort to shore up their capital…by luring in Dutch and British depositors. It failed to stave off collapse, sparked international tensions in late 2008, and it’s now coming back to bite the broken nation just when it hurts the most.

Because British and Dutch depositors – promised a guarantee scheme by the Icelandic government – now want their money back.

To stay in good standing with the IMF, Iceland has to comply with these demands. Lose the good faith of the IMF, and Iceland’s situation could rapidly deteriorate in the next few years. So parliament moved quickly to push a bailout through – getting it passed with a narrow margin of victory (33-30).

But can Iceland even bear the cost of bailing out foreign depositors? We’re talking about $5 billion dollars; or 13,000 euro for every man, woman and child in Iceland.

The historically timid Icelandic people answered with a resounding “Hell no!”

They took to the streets, torches in hand, and made quite a scene. President Grimsson soon vetoed the bailout, sending it to a national referendum and truly letting the people decide.

Now before you respond with your own resounding “Hell yeah!” at seeing the Icelandic people make a stand against bailouts, you should consider the situation…

The bailout might indeed have a crushing effect on their economy in the short-term…but Iceland is going to need the IMF in a big way over the next few years. Without their assistance, Iceland could be on the express train to the third-world, relinquishing what remains of the benefits of their own economic liberalization.

And this President isn’t a knight in shining armor either…

In the history of Iceland’s current government (since 1944), he’s the only President to have used the veto power. This is his second time…the first was back in 2004, when he vetoed a law that would’ve prevented a member of his party from setting up a media monopoly. So this isn’t necessarily a black-and-white situation.

And according to Thomas, Iceland’s population is truly considering the ramifications of the veto. “Back when he originally issued the veto, the President had an approval rating of 75%,” Thomas told us, “but as of today, that’s dropped to 50%, mostly on foreign pressure leading up to the referendum.”

Iceland’s people are gradually realizing the reality of their situation. When it comes to this bailout; they’re damned if they do…and they’re damned if they don’t. They’ve reached the point where there’s no more sticking their head in the sand.

British and Dutch depositors may indeed get their bailout, but there’s no bailing out the fate of the country at large. No more “do-overs.” Not anymore at least. The piper has come, and he demands payment.

And the rest of the Western world surely isn’t far behind…

De Omnibus Dubitandum,

Matthew Collins, A-Letter Editor