[Peace-discuss] Iceland's On-going Revolution

[Laurie Solomon]

Great post Jenifer.  I learned something new and interesting from this post as opposed to many other posts which present basically new presentations of old rehashed information (new forms of old substance).

From: Jenifer Cartwright 
Sent: Sunday, August 07, 2011 12:27 PM
To: Peace-discuss 
Subject: [Peace-discuss] Iceland's On-going Revolution




        Iceland's On-going Revolution

        By Deena Stryker
        Daily Kos
        August 1, 2011

        http://www.dailykos.com/story/2011/08/01/1001662/-Icelands-On-going-Revolution

        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.

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