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| Hördur Torfason at the second weekly protest, on the 18 October 2008 |
Iceland's Economic Recovery A Lesson for the World on how to handle financial difficulties.
2009 Icelandic financial crisis protests
The 2009 Icelandic financial crisis protests, also referred to as the Kitchenware Revolution occurred in the wake of the Icelandic financial crisis. There had been sporadic protests since October 2008 against the Icelandic government's handling of the financial crisis. The protests intensified on 20 January 2009 with thousands of people showing up to protest at the parliament (Althing) in Reykjavik.
Iceland's parliament is not elected according to the "one person, one vote" principal, with conservative rural areas receiving considerably more representation per person than the main cities.
Protesters were calling for the resignation of government officials, and for new elections to be held. The protests stopped for the most part with the resignation of the old right-wing government. A new left-wing government has been formed after elections in late April.
How All Began
Hördur Torfason Staged a One Man Protest
Concerned with the state of the Icelandic economy, Hördur Torfason staged a one man protest in October 2008. Torfason stood "out on Austurvöllur with an open microphone and invited people to speak". The following Saturday a more organised demonstration occurred, and participants established the Raddir fólksins. The group decided to stage a rally every Saturday until the government stepped down. Torfason led the protest from a stage near the front.
| Some of the 6000 protesters in front of the Alþingishús, seat of the Icelandic parliament, on 15 November 2008 |
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| Iceland Protests 20 January 2009 |
On 21 January 2009, the protests continued in Reykjavík, where the Prime Minister's car was pelted with snowballs, eggs, and cans by demonstrators demanding his resignation. Government buildings were surrounded by a crowd of at least 3,000 people, pelting them with paint and eggs, and the crowd then moved towards the Althing where one demonstrator climbed the walls and put up a sign that read "Treason due to recklessness is still treason." No arrests were reported.
On 22 January 2009, police used tear gas to disperse people on Austurvöllur (the square in front of the Althing), the first such use since the 1949 anti-NATO protest. Around 2,000 protesters had surrounded the building since the day before and they hurled fireworks, shoes, toilet paper, rocks, and paving stones at the building and its police guard. Reykjavik police chief Stefán Eiríksson said that they tried to disperse a "hard core" of a "few hundred" with pepper spray before using the tear gas. Eiríksson also commented that the protests were expected to continue, and that this represented a new situation for Iceland.
Despite the announcement on 23 January 2009 of early Parliamentary elections (to be held on 25 April 2009) and the announcement of Prime Minister Geir Haarde that he was withdrawing from politics due to esophageal cancer and would not be a candidate in those elections, protesters continued to fill the streets, calling for a new political scene and for immediate elections; Haarde announced on 26 January 2009 that he would hand in his resignation as PM shortly, after talks with the Social Democratic Alliance on keeping the government intact had failed earlier the same day.
Iceland's Economic Recovery A Lesson For Ireland from the Economist in 2010
The article in The Economist argues that Ireland could learn something from Iceland on how to handle financial difficulties.
The Economist points out, for one, that on the Misery Index (unemployment plus inflation), Iceland's level of "misery" has been steadily declining, and this year went below Ireland's, which is on its way up.
"Evidence of economic recovery in Iceland means the Irish can no longer persuade themselves that things are worse elsewhere," the article says in part. "Figures released on December 7th showed that Iceland’s GDP rose by 1.2% in the third quarter (Ireland’s third-quarter GDP rose by 0.5%, according to figures published on December 16th). The Icelandic central bank’s benchmark interest rate has fallen to 4.5%, from a peak of 18%. The halving of the dollar value of the Icelandic krona at the height of the crisis pushed inflation as high as 18.6%. It has since fallen close to the central bank’s 2.5% target. The 'misery index', a crude grading that sums unemployment and inflation rates, suggests Iceland is now doing better than Ireland (see chart)."
The reason for this, the Economist argues: letting the banks fail, and not being a part of a larger currency.
On the first point, the article says that by not pouring public money into trying to rescue its banks, Iceland saved itself revenue that would have been tied up in them. Ireland has attempted to save its banks, but has yet to see any benefit from doing so.
At the same time, the euro is no longer seen as the magic solution to economic troubles, the articles states. "When panicky investors were rushing out of small currencies in the autumn of 2008, the euro seemed a haven. There was much talk in Iceland of fast-tracked membership of the European Union and, ultimately, the euro. Two years on, the euro looks more like a trap for countries struggling to regain export competitiveness. Greece and Ireland have lost the confidence of markets, even though both issue bonds in euros. Iceland’s voters are cooler about joining the EU and the euro."
Not that either strategy is without its faults, of course. Iceland did not attempt to save its banks because it could not: the banks were several times greater than the GDP at the time of the crash. Furthermore, the article speculates that Icelanders might be more open to the euro if the economy of the EU were in better shape.
"Even so, that Iceland’s economy has done little worse than Ireland’s is still a triumph," the article concludes. "It has been tough with its creditors and disregarded some international norms—and recovered. Ireland has stood by its banks to the benefit of the wider European banking system. Its reward has been 'rescue' loans at an interest rate that makes it hard to fix its finances. The next Irish government may look at Iceland and decide to play hardball with Europe."
Real Democracy NOW! Greek: Declaration of Support from ICELAND Civic Movement
Iceland People Revolution: Country That Wants to Punish Bankers and Politicians Responsible for Economic Crisis Bailout's
From The Reykjavik Grapvine
Icelanders Thirst For Vengeance, Says Former Tycoon
Björgólfur Thór Björgólfsson told a Norwegian business newspaper that Icelanders in the wake of the area of "outvasion vikings" have sought vengeance against the rich. He also expressed regrets about buying Landsbanki.
In a nine-page interview in Dagens Næringsliv, RÚV reports, Björgólfur discussed his career and Iceland in general. When the subject of the crash was brought up, he had some strong words to share.
Björgólfur contends that shortly after the financial collapse, the general public wanted to strip the wealthy of all their assets. Rather than creating a "truth commission" modelled after the post-apartheid South Africa model, he says, parliament chose to be controlled by anger and take the matter to court, referring to the trial of former prime minister Geir H. Haarde.
He also said that the Special Investigative Commission report was flawed, contending that he was called a liar in the report but was never interviewed by anyone on the commission over his business practices.
He said that his reputation in the business world has been actively tarnished by the media, comparing his situation to the notorious Hafskip Case from the mid-80s - where a shipping company (owned by his father) on already shaky ground financially was supposedly put out of its misery by negative press coverage.
Björgólfur now sees himself in the same position, and claims that his damaged reputation means that he now owes some 1 trillion ISK.
When asked about some of the biggest regrets in his life, Björgólfur named purchasing Landsbanki. This, he said, he has often regretted, both before and after the financial collapse.
check also http://en.wikipedia.org/wiki/2009_Icelandic_financial_crisis_protests
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