The IceSave Memorial: How We Got To Where We Are

January 6th, 2010 → 10:09 am @

11


The IceSave Memorial: How We Got To Where We Are

The idea of an IceSave memorial is a great one. So here is a homage to the people who got us IceSave.

 

 

 

 

 

 

 

As Prime Minister and Finance Minister, David Oddson and Geir Haarde privatized Landbankinn into the hands of Bjorgolfur Gudmundsson, who had no experience in banking but had served a sentence for his part in the bankruptcy of Hafskip and made a mint in post-communist Russia. Half of the purchasing fee was borrowed from Bunadarbankinn (which became Kaupthing) and never repaid. Landsbankinn returned the favour for their Progressive Party counterparts.

 

 

 

 

Bjorgolfur Gudmundsson and his son, Bjorgolfur Thor wasted no time and appointed a host of Independence Party members to key positions in the bank. They also used the bank as their own personal piggy bank, borrowing billions upon billions to acquire publishing houses, newspapers, pharmaceutical companies, telephone companies to name a few businesses. Landsbankinn’s loans to connected individuals were way above anything which could have been considered as normal in banking. Or imagine Fred Godwin borrowing billions from RBS to buy Penguin, The Telegraph, Vodafone etc.

 

 

 

 

 

 

 

The father and son retained Kjartan Gunnarsson as the chairman of the board. Meanwhile he was also the CEO of the Independence Party.  It was a cosy relationship. A few days before the Independence Party government approved a new law limiting the amounts of grants political parties could accept,  25 million ISK found their way from the bank to the party. A big chunk but still just a part of the pie as MP Gudlaugur Thor Thordarson’s finances have revealed.

 

 

 

 

 

 

The man who approved the huge grant was former youth officer of the Independence Party and then CEO of Landsbankinn, Sigurjon Th. Arnason. A new employee at Landsbankinn in 2007 recounted how when he started working there, Sigurjon’s friend from the Independence Party and mid-level manager told him about the “real organization chart”, which showed how things really worked if you wanted to get ahead in the world of Landsbankinn’s type of international banking. 

 

 

 

 

 

The other CEO, Halldor J. Kristjansson had been the assistant of Progressive Party minister who turned billionaire through the privatization of Bunadarbankinn into Kaupthing. When financing the risky model that Landsbankinn like the other Icelandic banks were running, the bank came up with IceSave.

 

 

 

 

 

 

 

 

 

Alistair Darling is the finance minister of the UK. The UK allowed Landsbankinn to prey on the savings of the Brits when it should have been clear that the Icelandic Central Bank had no way of acting as a lender of last resort.

 

 

 

 

 

 

 

 

 

But neither did his Dutch counterpart and the Dutch National Bank do their homework. They allowed Landsbankinn to move in on the Dutch when one simple look at the Central Bank of Iceland’s foreign reserves should have told them not to.

 

 

 

 

 

 

They should have stopped it because this  guy wasn’t going to. Jonas Fr. Jonsson was the CEO of the Financial Authorities in Iceland and an Independence Party member. His job safety depended on not rocking any boats.

 

 

 

 

 

 

And guess who was by then calling the shots at the Central Bank of Iceland?

 

 

 

 

 

 

New chairman of the Independence Party, wasted no time in using IceSave for the political gain of his party. By screaming from the top of its lungs the party has managed to divert attention from its own role in the economic collapse of Iceland. No other issues have been able to hold the spotlight, such as the several times larger bankruptcy of the Icelandic Central Bank under the management of David Oddson, a review of the bank privatization process or the finances of the political parties.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Of course, distinguishing the Independence Party from IceSave is a hell of a task. Thorlindur Kjartansson and Erla Osk Asgeirsdottir ran for Althingi in 2008 as the young, shining stars of their party. They had just come off their jobs at Landsbankinn where they were supposed to do market research into which other countries Landsbankinn could launch IceSave. If they are next in line to succeed on the party’s behalf then surely a diversion tactic is needed to cast the blame for IceSave elsewhere.

 

 

 

 

 

 

 

 

 

The smoke and mirrors game also suited the old ally of the Independence Party, the Progressive Party under new leader Sigmundur David Gunnlaugsson who has cried wolf from the top of his lungs on the IceSave issue. The Progressive Party has a long history of chasing easy votes. It was not hard to convince a large part of the Icelandic nation that it might not have to honour its obligations.

 

 

 

 

 

 

So the InDefence group was formed. Behind the group which sort of promised Icelanders who signed their petition that they would not have to pay the IceSave debt is a nice little group of Progressive Party members, such as economist Magnus Arni Skulason who had to resign from the board of the Central Bank earlier this year for trying to assist wealthy parties in by-passing the currency restrictions in place in Iceland. A trustworthy and honest group if you ever saw one.

 

 

 

 

 

 

 

And the unloved lame-duck president bought the hype.

 

 

 

 

 

 

Finally we can only have ourselves to blame. For not being more alert to people who had grown so accustomed to running the country that they considered it a birthright. For not being more critical until after the crash. We were too busy keeping our jobs, TV’s and our cars safe that we forgot our basic rights and liberties. The Icelandic people allowed this to happen by becoming oblivious to criticism and celebrating cronyism. And for not wanting to learn from what has just happened.

Obviously the government of the Social Democrats and the Left Greens approved the IceSave agreement at the end of 2009. But it is sort of ridiculous and evil even to blame the cleaning crew for the mess left behind from the party.

Isn’t it?

 

Related posts:

  1. Silly Debate On IceSave
  2. Top 10: Who’s To Blame For The Icelandic Crash
  3. Priorities Of Icelandic Politicians
  4. IceSave: Really About Domestic Politics In Iceland – UK & Netherlands
  5. Ogmundur Resigns Amid IceSave Chaos
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