Iceland Was Always Too Good To Be True

Listen to the hype and you start to understand why Iceland, this island in the middle of the North Atlantic, full of lava, moss and geysers, is the dream destination for everyone in the world. Because of Björk, because of the nature, the elves, because it does not have any army, nor nuclear power.

If there is any country in the world that only elicits only positive associations, it is Iceland. It seems that if only everybody would be a bit more Icelandic the world would be a better, a paradise.

The 2008 financial crisis destroyed Iceland’s idealistic facade. But only briefly. It didn’t take long until Iceland was again seen as a beacon of new policies, equality and justice. It became the country that not only recovered but became fairer, more democratic and value-based.

In Iceland bankers were jailed, the government was toppled, a new constitution draft was crowdsourced and all live in harmony. Except that isn’t the case. Nothing is this simple.

Iceland has a lot to be proud of and there are things that can be learned from Iceland’s recovery, but perfect it is not. The 2008 crisis was at least in some part homegrown, and seeing its recovery as flawless neglected a great deal of internal conflicts and moral shortcomings faced by Icelanders on the path to recovery.

The situation in Iceland isn’t just an Icelandic matter, it is an international one. When everyone outside the country talks about Iceland idealistically it undermines what little criticism that exists internally.

Internationally, the Panama Papers brought to light details that in some cases were already known in Iceland. But without this disclosure that made the world aware of what was possible in Iceland, the Prime Minister would not have been forced out. Hence, the newspapers like The Guardian and Süddeutsche Zeitung not only contributed to transparency, but also to democracy in Iceland.

However, before the Panama Papers it would have been perfectly possible for foreign media to report on Iceland and its elites disproportionate offshoring. Prime Minister Sigmundur Davíð Gunnlaugsson’s offshore connections through his wife had been known for weeks, and that Finance Minister Bjarni Benediktsson had a Swiss bank account was already reported in 2010 by local media as was was his involvement in extracting private entities’ approx. €320 million out of Iceland just before the country’s banks collapsed, taking society down with it.

Local banks bought ads encouraging the upper middle class to offshore personal wealth as early as 1999. Iceland’s offshoring is and has always been an open secret. Owning an offshore company was practically a status symbol for Iceland’s old money and privatization profiteers.

Iceland is as imperfect as others. It is a small country where almost everybody knows each other and often journalists, businessmen and politicians, who should be opponents, went to school together, are friends and sometimes part of the same family.

Take Davíð Oddsson, a politician that shaped Iceland at least as much as Ronald Reagan and Margaret Thatcher shaped their countries. It is symptomatic of Iceland that he could go from Prime Pinister, laying down the policies for an exaggerated boom, to the head of the Central Bank, where he does nothing to prevent the financial meltdown, and then finally to Morgunblaðið, Iceland’s establishment paper, where he becomes editor-in-chief, rewriting history. Did it infuriate people? Yes, of course it did. Was there a significant decline in readership and revenue? Yes, but again the profit of silencing critical journalism is well worth the loss.

It is simply ludicrous to believe there exists an island that somehow consistently manages to be unaffected by greed, corruption and profiteering.

It reminds one of Putin, Erdogan or any banana republic, and shouldn’t be accepted and therefore certainly should not have been praised as the perfect example of a democratic society.

The situation in Iceland isn’t just an Icelandic matter, it is an international one. When everyone outside the country talks about Iceland idealistically it undermines what little criticism exists internally. The risk here are the same as with any child showered in compliments by parents and family. Constantly telling a child it is smarter, braver and better than the rest will convince any child these claims are true and force it to ignore the obvious signs to the contrary.

The journalists behind the Panama Papers have done us a great service, but let’s not pretend the leak is the first we hear of this. That simply is not the case, neither in Iceland nor the rest of the world.

Bloomberg, for example, reported on a scandalous VISA deal in Iceland. In 2014, public assets of the credit card company were sold to relatives of the Finance Minister at a cut rate. General interest newspapers paid scant attention. The scandal – though it lead to major changes at the board of a state run bank, that years before was at the core of the financial crisis! – was not seen as interesting enough, was too complicated to understand and after all stories about Iceland and elves are cheaper to produce and have a tendency to trend.

The same reason might apply to the lack of coverage after a recent change of law allowing the infamous banksters to be moved out of prison ahead of time passed without international notice. These are the same bankers the media world over has hailed Iceland for sentencing.

Editors are not the only ones at fault. We reporters should have pushed harder and pitched more on what lies beneath the glossy surface of Iceland’s recovery. The banana republic of Iceland has all the elements of an interesting story and can offer value to readers the world over.

Iceland has not gone unreported; just overpraised. While Icelanders attempted to reclaim their society from those that bankrupted it, international media told readers all over the world of a serene and cute island in the north.

Icelandic journalists must now take the time to wonder if they did everything in their power to make sure all relevant information was published in a way that offered the necessary perspective for the Icelandic public.

Perhaps the Icelandic media could have stopped the likes of Putin and Erdogan from running this perfect little island, but the task wasn’t made any easier by foreign colleagues constantly telling the rest of the world how delightful and wonderful it is to live in this magical land of democracy and purity called Iceland. It is simply ludicrous to believe there exists an island that somehow consistently manages to be unaffected by greed, corruption and profiteering.

Clemens Bomsdorf has since the early 2000s worked as a Nordic correspondent. His work about Iceland has been published in Zeit online, The Wall Street Journal and The Art Newspaper, amongst others.

Additional reporting was done by Thor Fanndal, an Icelandic investigative reporter. He is writing for Kvennabladid and Fréttatiminn. Currently he also attends the Masters in Journalism Programme at Edinburgh Napier University in Scotland.