Hvað hefur breyst frá því í janúar 2009?

Tímaritið Grapevine, sem kemur út á ensku í Reykjavík, bað mig að svara eftirfarandi spurningu:

What, if anything, has changed since January 2009, when we published your thoughts on 'What we had // What we can expect'? And what can we expect?

Hér eru svör mín:

Iceland has slowly been recovering from the fall of the Icelandic banks in the autumn of 2008. What has changed is that we now see more clearly that the fall of the banks was a result of external factors working on a vulnerable domestic situation. The difference is that the mistakes or miscalculations of the Icelandic banks have been brought to light whereas the shocking recklessness of many foreign banks, and other financial institutions, is being systematically hidden or obscured by massive public subsidies, by central banks in their countries simply pumping money into them. The unwillingness of the international community to help Iceland in its hour of desperate need may therefore have been a blessing in disguise. As a result, the banks fell, so we are not overburdened by public debt, like Greece and Ireland, and possibly some other European countries. Instead of subsidizing and continuing our mistakes, we corrected them, at least to some extent.

We also see much more clearly now that the history of Iceland since 1991 can be divided into three periods, first of stability, then of drift and lastly of vengeance. The David Oddsson governments of 1991–2004 promoted fiscal and monetary stability, paying the public debt, liberalizing the economy, privatizing badly run companies, strengthening the pension funds, and creating a feasible way of utilizing our fish stocks. The Geir Haarde governments of 2006–2009 just drifted, without sail or anchor. The ministers in the Johanna Sigurdardottir governments since 2009 seem to be bent on just one issue, vengeance against their old political enemies who won most of the battles of the past and all of the arguments. This was shown by their 2009 assault on the independence of the Central Bank, just in order to get rid of David Oddsson, then governor, and the only person of authority who had issued warnings against the vulnerability of the banks in a possible crisis. This was also shown by their extraordinary attempt to impeach Geir H. Haarde, who, inept and weak as he may have been, is as far from being a criminal as any person can be; and who incidentally included in his government since 2007 Johanna Sigurdardottir who was responsible for some of the worst mistakes that government made in finance (such as underfunded government mortgage loans which contributed to the Icelandic credit bubble).

In their thirst for vengeance, the present government ministers have gravely neglected Icelandic interests, as could be clearly seen from their soft position in the Icesave-dispute with the British and the Dutch governments. Those two governments had taken it upon themselves to pay out deposits in the Icelandic branches of the Icelandic Landsbanki, with full interest. The deposits were insured under EEA regulations by the Icelandic Insurance Fund for depositors and investors, an independent agency. When it became apparent that the Fund was not able to cover the outlays of the British and the Dutch governments, they demanded that the Icelandic government paid them what they had themselves voluntarily contributed, on their own initiative, to the balance sheet in the trade between two private groups, the depositors on the one hand and the failed Icelandic bank on the other hand. At the same time, the British government refused to acknowledge, let alone compensate, for the enormous damage it did when it brought down two Icelandic banks in England and for some time put the Icelandic Central Bank and the Icelandic Ministry of Finance on a list of terrorist organizations, alongside the Al Qaida and the Afghan Talibans, briefly stopping in the process almost all communication from Iceland, transfers and trade with the external world.

It was the Icelandic population, led by President Olafur Ragnar Grimsson and former Prime Minister David Oddsson, who said it loud and clear in two national referenda: We are not going to pay for the recklessness of either Icelandic bankers or of wealthy foreigners in pursuit of high interest rates. We bear no responsibility for these privately created obligations. We should not be worried, either, about international institutions trying to rally to the British and Dutch cause. Every day, the French or the Germans or the Italians break some EU regulation and are being reprimanded for it, without any consequences. Moreover, the Icesave-dispute will probably eventually disappear, as it seems that the failed Landsbanki has enough assets to cover liabilities such as deposits. It is also interesting that probably the assets of the three failed main Icelandic banks will be able to cover about 50% of their total liabilities, which is a much higher ratio than you see with failed banks in North America and Western Europe. This suggests that there is something more to the story than that the Icelandic bankers were only knaves and fools. (Probably they were no worse and no better than bankers elsewhere.)

Iceland’s recovery has been slow, and it has taken place despite the present left-wing government, not because of it. The government has tried to dismantle two very efficient systems which were put in place in the 1990s: the tax regime, with relatively low, easily collectible and efficient taxes, and the system of managing the fisheries with individual transferable quotas. There is little awareness within the present government that wealth has to be created, not only redistributed. Iceland, with its good location, accessibility, skilled population and ample natural resources, still has many opportunities to become one of the most affluent countries in the world. Alas, at the moment it is ruled by petty, vengeful characters who put obstacles in the nation’s way instead of removing them.