Ordinary Icelanders in uproar over crisis

1st January 2009, Comments 0 comments

Polite or not, the 320,000 citizens of the northern Atlantic island have been in a state of constant shock ever since the collapse of all three of Reykjavik's leading banks in October.

Reykjavik -- A spirit of rebellion has slowly enveloped Iceland, reinforced by every new horror story about the financial crisis.

"What responsibility to you feel over the fact that my debts have quadrupled, although I make my repayments on time and haven't taken out any new loans?" asked one ordinary citizen of Prime Minister Geir Haarde last month in front of 2,000 listeners.

"Somehow, everyone is responsible," the premier answered meekly. He added that his responsibility will have to be clarified before an independent "truth commission."
According to publicist Oskar Gudmundsson, "the way our government here is being brought to account is reminiscent of a Chinese people's court in the Cultural Revolution" -- albeit a very polite "people's court."

Polite or not, the 320,000 citizens of the northern Atlantic island have been in a state of constant shock ever since the collapse of all three of Reykjavik's leading banks in October.

That shock was compounded by inflation that has climbed toward 20 percent and a national currency, the krona, that has lost so much value that some see it on par with the nearly worthless currency used in Soviet-bloc countries during the Cold War.

"Iceland is sinking and no one knows when we'll reach dry land," said Andri Snaer Magnason, a spokesman for the fast-growing protest movement.

It is absolutely exceptional, given the country's tiny population, that almost 10,000 people are now arriving every Saturday to protest in front of the Icelandic parliament, the Althing. Single mothers, who suddenly have to cope with 100-per-cent rent hikes, stand shoulder- to- shoulder with prosperous-looking middle-class Icelanders facing the abyss due to credit pressures for their new apartments and cars.

"We are the people," is their mantra, displayed on placards as they stand under wintry and dark Icelandic skies.

In general, the feeling persists that the government stood idly by while extremely expansive and "daring" bankers played roulette with the entire country... and lost.

The Organization for Economic Cooperation and Development estimates that the entire indebtedness of the three banks -- Kaupthing, Glitnir and Landsbanki -- sits at five times the nation's annual gross domestic product.

A considerable portion of the population is also directly, personally and hopelessly indebted because the banks made all loans to domestic customers tied to inflation. The loans were also mainly in foreign currencies that have, due to the krona's depreciation, become astronomically expensive.

In addition, unemployment for 2009 is expected to climb to 10 percent, from 2 percent currently. Meanwhile, the state has to drastically cut its spending.

"In the eyes of people here, the system is as broken as that of East Germany before the fall of the wall. And corrupt through and through," says writer Einar Mar Gudmundsson.

He belongs among those who have again become politically engaged, demanding the government be replaced by a "cabinet of experts."

"Why should we normal citizens pay the bill for the madness of the banks and the inaction of the government?" he asks.

Icelandic pop singer Bjoerk handed Prime Minister Haarde a package of "good ideas" to solve the current problems. For her, EU membership is one of them, an idea that Haarde has previously rejected.

Bjoerk, along with Magnason and other young Icelanders, has been networking via the Internet. Many have never been politically active before.

Magnason however has gleaned something positive out of the current shockwaves.
"Now all our unemployed bankers suddenly have a lot of free time. These are well-educated, intelligent people. Hopefully we can use this resource sensibly and prudently. It doesn't always have to be about making loot," he says.

Thomas Borchert/DPA/Expatica

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