Published January 10, 2012
In April of last year, the Economist ran an editorial comparing Bjartur, the protagonist of Halldór Laxness’ 1934 novel ‘Independent People,’ to the persistently hard-toothed, ‘cussedness’ of modern day Icelanders (Bjartur is a crofter “who emerges from years of debt bondage and struggles…” to become a self reliant and independent person).
They may have been on to something.
A second unanimous ‘no’ from the Icelandic people on a second Icesave referendum had independent-thinking journalists the world over praising the will of Icelanders. The Economist observed that “there is an epic quality about the way this remote island of glaciers and volcanoes has stood up to powerful states and economic orthodoxy.” In February Bloomberg quoted Ólafur Ragnar Grímsson, Iceland’s President: “…the people should once again, as before, act together with the parliament as the legislator in this matter.”
Many have equated these and other events (the ‘Pots and Pans Revolution,’ the first Icesave referendum) as inspiration for movements all over the world, the most notable, of course, being Occupy Wall Street. Revolutionaries quite often seek inspiration in the least expected of places. Björk’s January ‘Karaoke Marathon For Nature,’ for example, features large on Time magazine’s notable events of 2011.
For all intents and purposes, it seems—outside looking in—that the Icelandic people are not taking any more BS and are singing wildly about it.
The New York Times also praised the Icelanders’ single-mindedness, saying, “[Iceland’s] refusal to take on bank debts, forcing creditors to take losses and share in the pain, looks increasingly smart as Iceland’s economy begins to recover.” On the surface it looked much like Icelanders were sharper cookies than the Irish or the Greeks. Yet, the point was (unlike Ireland, who’s debt is ‘only’ three times GDP) that Iceland’s debt was more than ten times its national economy. “Iceland wasn’t intentionally daring or smarter…It [just] couldn’t afford to bail out its banks, so it let them fail.”
Already in January, the New York Times had nominated Iceland as the country “who has come closest to doing an Argentina,” and noted that, “the combination of default and devaluation has helped Iceland limit the damage from its banking disaster. In fact, in terms of employment and output, Iceland has done somewhat better than Ireland and much better than the Baltic nations.”
Money Management also used the Argentina comparison. “At the end of 2001, the South American country defaulted on debt and snapped the Peso’s currency peg (a similar constraint as belonging to the Euro) to escape an IMF-imposed recessionary spiral.” Apparently, in order for a country to be better off defaulting (as in Iceland’s case), “its budget needs to be at least in balance before allowing for interest payments—Greece isn’t there yet.” Not by a long shot.
Let’s see what the EU powers have to say about it in 2012.
The New York Times contemplated whether other European nations might consider the path that Iceland has taken. One crucial factor that appears to limit them from doing so: the Euro. Barry Eichengreen, a Berkley economist told the New York Times: “…any Euro-zone country that even hinted at leaving the currency would trigger a devastating run on its banks…”. A portent of European things to come, perhaps? Many of us will of course have heard that Iceland’s Progressive Party is currently suggesting an adoption of the Canadian dollar (otherwise known as the loonie).
Surely you’d be loony not to.
In June, the re-writing of Iceland’s constitution by her citizens continued the global media-praise. For the rest of the world this seemed like another inevitable consequence of this wind-worsted, iron-willed people. In the same month, former Prime Minister Geir Haarde was indicted by Alþingi for failing to prevent the financial crisis and ensuing chaos, and for not upholding the constitution.
Referring to Ólafur Ragnar’s October speech at the PopTech conference in Maine, PSFK (an arts and media website), stated: “there is no doubt that the Icelandic government is not just aware of its flaws and shortcomings, but with a humility uncharacteristic of most nations, has a flexibility and communal spirit that has allowed it to roll with the punches through this tumultuous period.”
Obviously they were not aware that Iceland’s not-quite-so-humble former Prime Minister has unilaterally rejected all of the charges against him.
In September, Ben Chu in the Independent called Iceland “the economy that got out of jail,” and hailed this stubborn Atlantic nation as “a pioneer in political accountability during the credit bust.” He also cites the default as a factor in Iceland’s surprising recovery, but proposes that it was a lucky combination of default, depreciation and the IMF’s insistence on capital controls that has managed to turn things around.
Apparently, man cannot live on export alone.
September too was the month that saw Chinese entrepreneur Huang Nubo making his move to acquire a pristine swathe of Iceland. Considering everything else that had taken place in 2011, it was seriously implausible that Icelanders would stand for this. The Wall Street Journal pointed out that what made Icelandic officials nervous was “…Mr. Huang’s past work in the Communist Party’s Propaganda Department and his continuing membership might figure into his Arctic Circle ambitions.”
In December, a huffy Huang recently told reporters, “I feel proud to be a communist party member,” and, “they [Icelanders] are ill, and when they’re weak a young and robust man comes that frightens them.”
It appears then, like many others, Mr. Huang just does not comprehend this fiercely independent people living on the edge of the world.