11/05/2012
The on-going revolution taking place in Iceland is a stunning example of the bias shown by our media for its total absence of Icelandic news. Since the financial crisis of 2008, when Iceland literally went bankrupt, little or no mention of Iceland ever occurs anymore.
As one European country after another fails or risks failing or endangering the Euro, with repercussions for the entire world, the last thing the “powers that be” want is for Iceland to become a success story.
Here's why:In 2003 all the country’s banks were privatized, and in an effort to attract foreign investors, they offered low-cost banking offering relatively high rates of return. The accounts, called IceSave, attracted many English and Dutch small investors.
Five years of a pure neo-liberal politics made Iceland into one of the richest countries in the world. But as investments grew, so did the banks’ foreign debts.
In 2003 Iceland’s debt was equal to 200 percent of its GNP, but by 2007, it had grown to 900 percent. The 2008 world financial crisis was the breaking point. 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.
Unexpectedly, the crisis has resulted in Icelanders recovering their sovereign rights, through a process of direct participatory democracy that will eventually lead to a new Constitution.
The Prime Minister of the Social Democratic coalition government, Geir Haarde, negotiated a two billion dollar loan, to which the Nordic countries added another two and a half billion. But the foreign financial community pressured Iceland to impose drastic measures.
The IMF and the European Union wanted to take over its debt, claiming this was the only way that the country could pay back Holland and Great Britain, who had promised to reimburse their citizens.
Protests and riots followed, which eventually forced 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 billion Euros.
This required each Icelandic citizen to pay 100 Euros per month for fifteen years, at 5.5% interest, to pay off a debt incurred purely by private parties. It was the straw that broke the camel’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 cheque accounts.
In the March 2010 referendum, 93% voted against repayment of the debt. The IMF immediately froze its loan. But the revolution (though not televised), 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 will free the country from the exaggerated power of international finance and virtual money
To write the new constitution, the people of Iceland have elected twenty-five citizens from among 522 adults not belonging to any political party but each recommended by at least thirty citizens.
This document will not be the work of a handful of politicians, but is being written on the internet. The constituent’s meetings are streamed on-line, and the citizens can send their comments and suggestions and witness the document as it takes shape.
The constitution that will eventually emerged from this participatory democratic process will be submitted to parliament for approval after the next elections.
Today, Iceland is recovering from its financial collapse in ways just the opposite of those generally considered unavoidable, as confirmed recently 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 and refuse to bow to foreign interests, by stating loud and clear that the people are sovereign.
But that’s why Iceland is not in the news anymore.
