Lessons to be learned?
Iceland has just come throught an economic crisis. It looked set to cripple them for years. Yet they have turned the corner that we in Ireland are finding elusive. Can we learn some lessons from them?
Mr Olafur R. Grimsson, current President of Iceland, last Friday gave an interview to Bloomberg. He spoke about how Iceland have regained financial stability. He was very upbeat for the Icelandic economy which is surpassing all expectations as regards economic indicators. Furthermore he hopes that Iceland will in 6 months become self financing, i.e. no longer need any help from the IMF.
The crisis in Iceland
Simliar to Ireland Iceland problems stemmed from a rapid expansion of their banking sector. The Icelandic banks lent as recklessly than Irish ones, with its debt at the 900% of GDP(1) when the crisis broke in Oct 2008 (Just after the Lehmann's collapse and after the Irish government gave their infamous guaranntee to all bank debts.)
The IMF rode into Reykjavík in Dec 2008 and did a deal with the government. The people took to the streets in what was termed the Kitchenware protest. This began in Oct 2008 with one man and
a mike and escalated to daily protests and marches, some of which turned nasty and into riots. The government fell and new elections occurred in April 2009 which saw the centre-right government being replaced by a centre-left.
Since then the people have become very engaged politically with the process of solving the crisis.
Mr Grimsson, a leader of Iceland
Mr Olafur R. Grimsson, current President of Iceland, was first elected to the office in 1996. This is his fourth term as President.(2)
He speak authoritatively for the Icelandic people and seems not to have be tanished by the corruption allegations which led to other political leaders being ousted. Unlike the Irish politicians he speaks with a
tone of a real leader, straightforward and honest.
Not a just a financial crisis..a test of our democratic systems
Mr Olafur R. Grimsson says "fundamentally this is not just a finanical crisis, it is also a fundamental test of our democratic systems"(6.10)
The UK and Dutch governemts tried to force an extremely large debt on the Icelandic people. Mr Grimsson would not agree to it and put the question to a referendum "The essence of the referendum was this, if the people of Iceland are being asked to pay for the failure of private banks, they should also have a say in the final outcome...So I don't think that any deal which will not be in harmnoy with the will of the Icelandic people is viable."(4.90)
Mr Grimsson says that the UK and Dutch now recognised that what they were asking the people of Iceland to do was unfair and are moving from their current position. The negotiations are called Icesave.
What the Icelandic people have shown since the crisis started is a demand that the economic problems should be solved democratically. This is what their President echoes. When I visited Iceland about 5 years ago I noticed that the people were independent minded and extremely resourceful in the face of daversity. Perhaps this has come from years of eking out a living in harsh condition.
The countryside was also very unculltered, particularly devoid of any large advertisements posters which are now the norm in every European/North American country. A symbol of a more independent thinking country?
Democratic Protests Irish Style
What seems different in Ireland is that the Irish peole are slower off the mark when it comes to protesting. But like the Icelandic people the Irish have a strong sense of justice and democracy althought this is often unexpressed at national political level. The Irish have proved fairly reliant and resourceful since Independence. And they make a big deal of Independence which they will draw on in these times of crisis.
The current Irish government looks like they are too intertwined with the rich and powerful.
The Irish people are slow to see this but it is becoming clearer.
The current government also is deaf to calls for getting the people involved in the big decision involving the IMF/EU which has far reaching consequences for the Irish for many years. I wonder why they will not put things to a referendum or even a Dáil vote? It is a natural democratic impulse to put very large and important national decisions to the people. This is how democracy not only works but is seen to work.
This current administration has been in government for nearly 13 years. But it is not only the government that needs changing. Many mindsets and ways of doing things in Ireland need to change to solve this current crisis.
Tough times in Iceland
But it is not all bright news. It has been a very difficult few years for the Icelandic people. Unemployment and emigration has soared and recent protest centre around increased level of house repossessions which the new government promised to protect.(3)
Yet they have financially turned the corner and they are standing up for themselves. Fingers crossed the Irish will start putting some effort into solving their own problems in a realistic sense and not leave it all up to others. It is going to be tough either way, but perhaps if the people become engaged they might learn how to take responsibility for their actions and solve the crisis as best they can.
The Actual Interview
Here is the interview with the Icelandic President
http://www.bloomberg.com/video/64807970/
It is 6 minutes long, I presume the Bloomberg interviewer is being extremely clear in his
speech because of the international nature of the audience.
References
(1) For a detailed view of the banking crisis see www.icenews.is/index.php/2009/02/10/entranced-by-banking/
(2) For some information on Mr Grimsson http://www.iceland.is/government-and-politics/Government/OfficeofthePresident/
(3) Fresh Wave of Protests outside Icelandic Parliament, 02 Oct 2010
http://www.icenews.is/index.php/2010/10/02/fresh-wave-of-protests-outside-icelandic-parliament/
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