From Iceland — The Year 2015—Where Does Iceland Stand?

The Year 2015—Where Does Iceland Stand?

Steingrímur J. Sigfússon, MP, former Minister Of Everything, Left-Green Party

Iceland saw progress in several areas in the year 2014. We enjoyed some economic growth, even though Statistics Iceland’s quarterly numbers were disappointing. The economic recovery, which began with the economy’s turnaround in 2010, continues for the fourth consecutive year. Unemployment numbers kept decreasing, as they have since they peaked in the spring of 2010. The state treasury further recovered after being balanced for the first time post-collapse in 2013. However, the recovery of 2014 is unfortunately first and foremost due to irregular, one-time credit entries from the Central Bank of Iceland and Landsbankinn. The underlying recovery of the state is thus nominal in actuality. Nonetheless, 2014 marks the state’s sixth consecutive year of overall recovery. Furthermore, public spending power continued improving, although a growing economic divide is implicit in this development.

To summarize: the recovery process continued in 2014. There are those who maintain that a great transition, a turnaround even, occurred when the current government took power at the end of May 2013. The Prime Minister, the head of the state budget committee and other government affiliates are prone to speak as if the brunt of any good fortune Icelanders have enjoyed since settlement times occurred when the collapse-parties resumed their reign over Iceland. Such claims are naïvely egocentric, solipsistic even, as official economic statistics aptly demonstrate. Regardless, we continue pulling forward in most areas, and the recovery that commenced halfway through the last parliamentary term is still ongoing.

There are unfortunately storm clouds on the horizon. The year 2015 has potential to be the first one a long time where the state treasury’s returns do not improve, but grow worse. There is much uncertainty with regards to the imminent general wage negotiations, and the governing parties seem to harbour fundamental disagreements over how to lift the currency restrictions. This does not bode well, as it is the biggest, most fateful post-collapse task that remains unresolved.

So: Iceland is in an infinitely better position than it was in 2008-2009, but there is still much work to do—and the current outlook is uncertain, to say the least.

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