Why Iceland Should Be in the News, But Is Not

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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.

 

Will I just stick to information about the US and Israel, from now on?

Not bother with the rest of the World?

 

Now that your saying it....
Nobody want's to dig into this. I have no idea what actually happened to Iceland in the end. I'm sure they are doing fine though... They did the right thing.

 

Iceland! Crap! I forgot all about Iceland! I knew I'd forgotten something.

Thanks, Napier!

 

Think about that.

A brand new consitution, written by the people, that you could see take shape, online.

People standing up to the theft of bankers, who say that we people must pay for their errors.

And winning.

Yes, little wonder such a story now gets sufficient exposure, I can well see why the West would now rather forget Iceland.

 

Thanks for posting it Jack. I think America would be in a lot less trouble today if it had done what Iceland did and let Goldman Sachs, JP Morgan, etc. collapse.

That would have driven a stake through the "Greed is good" business model once and for all.

 

Iceland is proof positive that, sometimes... the only way the public wakes up is for everything to truly collapse.

Perhaps, Greece and Portugal will follow suit and regain their autonomy.

 

No human being can justly be forced to pay off the debts of another, whether it is debts incurred by private parties or public entities like government.

But, I question, by what objective reasoning do you claim it wrong to put the burden of a private debt on a third party without his consent but claim it right to put the burden of caring for strangers, including paying their healthcare, food, education, etc. on a third party without his consent?

 

They should. Though, the question then becomes, how will they maintain their massive welfare states as producers flee for better business climates and no one is willing to lend them the money?

 

iceland had a good fishing industry until they took a page out of American crony capitalism in the financial markets and made all their fisherman learn to be currency traders

after the US led world economy crisis they are all poor now

 

Admittedly, Iceland is better suited for revolution than most.

They have a small population that is well educated and skilled, and they are geographically separated from the rest of the world by two oceans. They theoretically could design a nearly completely self-sufficient economy.

The few things they need from the outside world could likely still be acquired through trade negotiations.

Portugal and Greece are very different and will likely have to dispose of a large portion of their welfare programs to become competitive again. I figure one of the better outcomes for them is to somewhat follow the Czech Republic's example.

 

I could not agree more.

The problem is this, you have large numbers of sheeple, who, amazingly, have been brainwashed into believing that they actually NEED these criminal mafia elites, and their bought media! It is like turkey's voting for Xmas. And even when these elites admit that they rule people, even when they no longer hide how greedy and bombastic that they are, there are STILL sufficient numbers of useful plebs, prepared to argue a case, on their behalf.

For all the bravado that I read from Americans, about protecting themselves and their constitution, when it comes down to it, they either haven't, or they didn't try hard enough and failed. I read posts on here from Americans who try to come over all alpah and patriotic, and drop in a mention of how many guns they own, and yet, all the while, these same men have done nothing at all to protect their country from being undemocratically controlled by banks, corporations, and a foreign entity called Zionism.

I am pretty sure that this was not the vision that the founders had in mind, nor many great Americans, so why haven't these chest puffers actually walked the walk? Instead, in an example of staggering stupidity, they puff out their chests, and would sooner defend the criminal mafia, while calling anyone that wishes to expose the criminal mafia as their enemy.

The people of a small country like Iceland, without the bravado, without the guns, and without the violence, they have managed to achieve more than Americans, they have freed themselves from criminal mafia.

And the world news doesn't want the world to realise this.

Lest people get ideas, and think 'Well, if Iceland can do it...'

 

Agreed, although it would probably take a large portion of the world a long time to recover.

We'd be suffering right now, but our children and grandchildren would later thank us for it.

 

Indeed.

Nothing acts as a better means of getting them to put down their X Box for a while, or reading something other than about how many affairs Tiger Woods has had, or how much Amy Whinehouse drank, to focus their thinking.

A better approach would be to act before things got that bad.

It's easy enough.

It begins with awarenes of certain truths. The truths alone are useless, unless a person has awareness of them.

 

We should have let the banks fail.

 

Didn't your motor industry ask for an amount a tiny fraction of what was undemocratically give to bale banks out?

Was that endorsed in full?

 

What are you getting at?

 

Getting at?

I am asking an open question!

 

Direct and profound.

 

But we thought Obama was riding in on his white horse to punish those dirty bankers and bring the change! He knows what it's like for Americans to watch their president bailout bankers by the boatload, believe him, he knows how it feels..but.... Should we storm the castle? The average American has no problem with the creation and monopoly over currency. They just want to either blame the corporations or the government. It's all one or all the other.

Iceland actually proves that it is easier to deal with economic turmoil on a much smaller scale. How broad do you think the shock waves from an American default would spread? We're tangled in a worldwide web of debt. And just look at the Europhiles, pushing for an even stronger centralization of power and enslavement to the euro and the international bankers.

There's only one candidate in America who wants to do anything about the bankers and the currency, it's not Barack.

 

I'll bite - who is this one man, and what does he want to do? Moreover, are his ideas feasible, or are they merely hollow words which, the moment he found himself in the hot seat, he would not deliver on, either because he was made unable to, or because he never intended to, all along..?

 

Dr. Liberty, Ron Paul. It's not feasible to the megabankers (who own the Federal Reserve and basically all Central Banks in the world) and their bought-off economists. But then again, I'd say that we've been listening to them for too long. The gold standard is unimaginable to the thieves at this point, even though we still had a gold standard 40 years ago, now they just print money at will and toss it around the world to their partners.

 

But surely anyone of modern politics is a child of the system, and the system itself has been contaminated bad, and for a long time, therefore, any children of the system (professional politicians), can only be defective, by association?

 

Hard work?

 

Ron Paul is excellent, but I'm afraid he would get killed if he actually did what needs to be done