This worldly absolutism is no less with the heathens than with the Christians-by-name. The spiritual descendants of the radical socialists and liberalists of the nineteenth century who protested the slave-morality of the church by preaching the godliness of man along  with scientific reason have fallen into these traps one by one. Even those who have appeared the most radical and strongest in their denial of God, caught the religious imagery of Christianity with fervor and transferred them onto the Earth, not only heaven and hell, the original sin, the uprising and godly foresight, but Stalin, Lenin and Marx assumed the roles of the son, the father and the holy spirit and played them out in the minds of people all over the world for a quarter of a century. Even if this horror has now revealed that it is all about pure power, and that men have learned many lessons, it is not therefore said that political worship of idols is history. It appears regularly, even in the best of places. When Mitterand was elected the president of France last year, it was plain to see that to many the great father had appeared down amongst the sinners, metamorphed as Mitterrand. Even in Iceland, democrats in two parties could argue amongst themselves for days, in full seriousness as far as one could see, about which party should claim his glorious light  as its own.

I would rather ask for Jahve himself.

Icelandic absolutism in recent years is mostly of a different kind, the belief in the supernatural powers of the so called quality of life, self denial in consumption, asset gathering and positional strife hoping to achieve the final glory. And here there is nothing to divide the classes, parties, representatives of wage earning people as well as the employers association and the state’s institutions, including the national church. What it preaches, it practices, the quality of life as absolutism and its Christianity as a serving part. Modern Icelandic Christianity if it can be called Christianity at all, is shaped first and foremost by the lack of criticism by which it adjusts itself to the development of capitalism and the culture which is both its premise and its adherent and becomes thinner and superficial each year. The Church which surrenders itself to it, thereby admits its belief as a sidenote and resigns all possibilities to preach it as something different and something more. Not just because of its own position but also and no less because from this shredder of a cultural development arrives a personality so shallow, or crippled that it is useless in practicing faith. It might not lack the knowledge or will to believe, but in any other sense his spirit is unavailable, and therefore not ready. His God becomes at best a neurotic anchor or bonus added to the life which the man does not live within, a crutch of sorts in his desperate attempt to grow through the quality of life. Here as elsewhere around the Western world, deep faith is only theoretically available to most people. Beecause faith is a question of emotional freedom as Paul Tillich claims. It can be added that emotional freedom (or something in that direction) is a luxury which capitalism is unable to produce, it can only make a meal for itself from its absence.

The church’s lack of criticism towards this development is not only borne of ineptitude, narrow mindedness and its love affair with the powers of state which cannot be said to be controlled by human kindness alone, but its roots are in the determinism of the original Christianity which can be traced back to the world view of the ancient Hebrews: what happens is unavoidable because it is part of godly providence and what will happen cannot be changed without affecting it. As is known, Christ did not arrive to remove these truths but to fulfill them. Since then they have become the cornerstones of religiosity and woven together with the rule which says, “Render unto Caesar the things which are Caesar’s, and unto God the things that are God’s” – in fact an admission of the duality of power as worldy and godly, of duality of human reality into religion and politics. From this and other things came forth the common denominator of all the Christian cultures, a submissivness towards historical advancement. It is not until this century that it occurrs to a few Christian men that they ought, as people of faith to be responsible for themselves, their community and therefore history. And it can be truly said that it is not too early as the worldly power brokers seem to be aiming towards the destruction of us all.

But as it remains, it appears to me that Christian men in Iceland prefer, with few exemptions to sleep calmly in the comforts of their savior.

- Vesteinn Ludviksson, 1982

Related posts:

1. Religous Belief In The One True Party
2. Greed Is God
3. A Necessary Attack On Religion

Links provide access to full documents over at Wikileaks:

September 30, 2008

Under the agreement, the Government will
purchase 75 percent of Glitnir at roughly $878 million.  This is the
first significant government intervention in the Icelandic economy
during the recent crisis and comes after a week of harsh criticism
for perceived inaction -- in particular, for not managing to include
Iceland in the 24 September exchange agreement between the U.S.
Federal Reserve and the central banks of the other Nordic countries
and Australia. 

October 8, 2008

Sturla Palsson, Director for International Affairs and Markets
at the Icelandic Central Bank told EconOff that the 4 billion Euro
loan offered by the Russians is 95 percent certain to happen.
October 8, 2010
The Icelandic economic crisis continues with no end
in sight.  The possibility of a Russian loan bailout as well as
concerns voiced by some American bankers raise the question of
whether greater USG involvement in the crisis is merited.

The U.S. has strategic interests in the high north and a
sturdy security relationship with post-Keflavik Iceland that both
sides have labored to develop.  Today the Embassy urged senior reps
in the PM's office and elsewhere to at least explore what
confidence-building cooperation (other than the credit swaps the Fed
turned down) may be possible to develop.  We doubt that it would be
in the interest of the U.S. or NATO for the Icelanders to be beholden
to Russia, however "friendly" the loan terms may be. 
October 9, 2008
The Russian loan is still part of Iceland's plan.  Prime
Minister Haarde said last night that the loans from the IMF and
Russia "are not mutually exclusive" though the government had not
asked IMF for a standby loan or an economic program.  He repeated
that statement in a press conference today.  Questions about the
influence the loan might give Russia continue to be met by assertions
that finances and foreign policy can and will be kept separate. 

6. (C) Minister of Finance Arni Mathiesen travels to Washington
tonight for World Bank meetings.  Post persuaded the Minister to
agree to meet with senior Treasury officials while in the U.S.
Mathiesen will meet with Treasury A/S Clay Lowery on October 10.  We
would hope this meeting will help the Icelanders think their way
through the present crisis and move from a stopgap reactive approach
to a durable comprehensive plan.  It should also make clear to them
how the U.S. can and cannot be of assistance and point them in the
direction of other options.
October 10, 2008
Two Icelandic bankers met with Econoff today to emphasize that
the Icelandic authorities have chosen the wrong path out of this
crisis and appealed for Washington to provide guidance to the GOI.
The bankers shared a graph that showed of the 11 billion euro
Landsbanki debt, 31 percent belonged to the U.S. and Canada.  They
emphasized that Landsbanki had the smallest foreign debt of the three
banks in Iceland and that American investors will lose billions.
They outlined a plan emphasizing the importance of bringing the
creditors to the table, getting the IMF involved and finding a
resolution through a multilateral approach.  They stressed the need
for the U.S. to become involved both to encourage the Icelandic
authorities to "be rational and swallow their pride" and for the U.S.
to build consensus within the IMF to allow Iceland access to the
supplemental reserve facility such as Korea, Turkey and Russia have
used in the past.  They believe that the IMF stamp of approval will
help bring creditors to the table and what is needed the most is a
coordinated multilateral approach.
October 20, 2008
Sturla Palsson, Director of International Affairs and Markets
at the Icelandic Central Bank and leader of the recent Icelandic
delegation to Moscow to negotiate a 4 billion Euro loan from Russia,
told Econoff that the Russian loan was still very much on the table
and that both sides are keeping in telephone and email contact.
Palsson said the two sides might meet possibly this week, and thought
that the loan could be finalized by Friday.  He said before the
Icelandic delegation left for Moscow, they had been told by the
Russian Ambassador to Iceland that the Russian Prime Minister had
signed off on the loan.  The discussions in Moscow centered around
details such as whether the money would be given as a bond or loan,
and what the maturity dates would be, etc.  The loan would be coming
from the Russian Development Agency.  Palsson said that Iceland is
considering IMF assistance and that initially the Russians had been
against Iceland involving the IMF "because of the Russians' own
negative experience with the IMF in 1997." 
Comment: Icelanders are aware that a loan from the Russians
may have implications.  The fact that they are proceeding anyway is
an indication of the seriousness of the financial situation here.
October 30, 2008
SUBJECT: ICELAND'S REQUEST FOR A LOAN:  WHAT'S IN IT FOR US
1.(C) The brutally sudden collapse of the Icelandic banking system
earlier this month threatens severe economic hardship for the
citizens of this import-dependent economy.  The government has
reached a tentative agreement with the IMF for a USD 2.1 billion
loan, but must raise an additional USD 4 billion from other sources
to conclude the arrangement.  They have asked us to join what they
hope will be a consortium of lending countries by providing USD 1
billion.  Despite the obvious hurdles - Iceland's status as a
developed European economy, the extent of its need, our own limited
resources - this request deserves the most careful consideration: we
have long-term national interests in the North Atlantic that a
negative response would jeopardize.  These include: 

2.(C)Iceland's strategic importance to U.S. security.  Iceland has
hosted an important American military outpost since World War II.
During the years before we redeployed our forces in 2006, the U.S.
poured a quarter of a billion dollars annually into our base at
Keflavik.  We turned the base over to Iceland's custody in September
2006, handing over responsibility to Iceland as NATO host nation for
maintaining the airport and long-range radar installations on behalf
of the alliance.  In the subsequent two years, the Icelanders have
provided outstanding support to two large multination NATO exercises,
two U.S. naval visits, and several deployments of NATO air policing.
French, Norwegian, and U.S. fighters have shadowed Russian bombers
and fighter planes from Keflavik.  Because the Icelandic government
has maintained the facilities at top-notch operational standards, the
base is immediately usable should circumstances warrant.  A nation
crushed by economic depression cannot be the self-sufficient partner
we have spent decades and huge amounts of U.S. taxpayer dollars to
develop. 

3.(C)A well-positioned friend in the High North.  If the U.S. doesn't
help out Iceland when it is flattened by the worst financial crisis
in its history, we shouldn't expect the country to see it our way
when we ask - as we undoubtedly will -- for cooperation in furthering
our own security and economic aims in this increasingly vital region. 
 The NATO conference that Iceland is hosting to discuss High North
issues this coming January underlines the uncertain implications of
the environmental changes occurring in Iceland's North Atlantic
neighborhood.  The melting Arctic ice means new trade routes and
increased competition for gas, petroleum, and other resources.  The
Russians - who are discussing a loan with the Icelanders - have
already signaled their interest in exploring and exploiting Iceland's
potential undersea oil and gas fields.  The Chinese - whom the
Icelanders are also approaching for a loan - will be big users of the
new sea lanes. Iceland may be small but it is valuable real estate in
a region that will only become more important to our economic welfare
and our national security.  We want a firm friend and a stable ally. 

4. (C) Clean energy partner and economic investment. Iceland is a
world leader in renewable energy and stands to play a significant
role in U.S. efforts to become energy independent.  They have
know-how and enterprise and their experience in harnessing
geo-thermal energy is second to none.  American firms are
capitalizing on Iceland's abundant clean energy and technical
expertise by investing close to USD 4 billion in the aluminum sector
here.  We want Iceland to be in a position to attract foreign
investment and continue to develop its energy sector outreach.  A
bankrupt economy would set our partnership back for years just when
we need Iceland's technical skills and entrepreneurial drive most. 

5.(C) Iceland is reaching out with increasing desperation to any
available source of help as it confronts one of the most trying
crises in its history. Assistance from the U.S. at this crucial time
would be a prudent investment in our own national security and
economic well being.  The Icelanders take fierce pride in their
flawless history of paying back their debt. Whatever the financial
turmoil and uncertainty of the moment, it's a good bet that this
economy of highly-educated, imaginative, and sophisticated people
will take off again.  And when it does, and when the competition in
the High North really gets underway, it may be more important than we
can yet suppose to have the Icelanders remember us as the kind of
friend who stands by in fair weather and foul. 

November 10, 2008
1.  (C/NF) Summary:  Public support for Iceland's government has
fallen below 50 percent in the wake of the financial crisis here, and
cracks are beginning to widen between the two coalition parties as
weekly demonstrations grow in size and fervor.  PM Haarde's
Independence Party (IP) has taken the brunt of criticism for the
failed economy, while Foreign Minister Gisladottir's Social
Democratic Alliance is polling higher than its election results last
year.  In the short term, a lack of viable (i.e., pro-EU) partners
and Gisladottir's good relationship with Haarde will likely keep the
FM from breaking up the coalition in the hope of new elections.
However, Gisladottir has said publicly she is pushing within the
cabinet for Iceland to explore EU membership, and polls show a
majority of the public agree with her.  Securing a $6 billion package
of IMF and bilateral financing will buy the government some time, but
if Haarde cannot convince his party to go along with exploring EU
membership we could see early elections called for the first time
since the 1960s.  Some form of reshuffle is almost inevitable,
however -- Haarde will not be able to answer the growing pro-EU group
in his party without lots of blood on the floor and the rousting of
several old IP chieftans (including the Minister of Justice and
Central Bank Chairman David Oddsson).  End Summary. 

2.  (SBU) Following the economic disaster of October and the collapse
of the country's banking sector, the government continues to take a
beating in the polls.  Public support for the government fell to 46
percent by the end of October, down 30 points from the beginning of
the year.  While support for the Social Democratic Alliance (the
junior coalition partner) has held steady or increased slightly,
Prime Minister Haarde's Independence Party (IP) has been hammered.
The IP, after nearly two continuous decades as Iceland's largest
political party, is now third behind the SDA and the opposition
Left-Greens, pulling only 22 percent in the polls.  The opposition
parties and a growing portion of the electorate are now calling for
elections before the current term ends in 2011.  A poll at the end of
October showed 60 percent support for early elections, and the
Chairman of the Left-Greens showed up at the Embassy's Election Night
event gleefully working the room with that encouraging datum.
Demonstrations calling for -- among other things -- a new government
continue to grow, with the latest protest on November 8 drawing over
3000 participants. 

3.  (C) That the public blames the IP specifically for the economic
crisis is no coincidence -- the Prime Minister and Minister of
Finance are both from the party, and the IP's 2007 campaign was based
on the notion that only the Independence Party could be counted on to
maintain Iceland's then-world-beating prosperity and quality of life. 
 More significantly, many domestic and international observers blame
former PM and Grand Old Man of the Independence Party David Oddsson
for Iceland's stunning loss of credibility in the financial world.
Oddsson has served as the highly controversial Chairman of the
Central Bank since 2005.  He made a number of ill-considered
statements to the media early in the crisis, and many suspect it was
at least partially due to his wounded pride that Iceland did not
immediately seek IMF assistance.  Haarde's apparent inability to
"control" or remove his predecessor as IP Chair has led many to blame
the Independence Party for the continuing economic bad news. 

4.  (C/NF) Indeed, Haarde missed a key opportunity to gain political
support by not replacing Oddsson early in the crisis.  Even among IP
stalwarts, Oddsson's standing has never been lower, with the party's
younger, more business-oriented members asserting to Emboffs and
journalists that it was time for Oddsson --rabidly anti-EU membership
for Iceland -- to finally exit the stage.  Only Haarde has the
authority to replace the Central Bank Chair, and speculation around
town is that the PM has not pulled the trigger thus far out of a deep
sense of personal loyalty to his old mentor.  The result is that
demonstrators now excoriate Haarde as well as Oddsson, the initial
target of public ire.  While Oddsson remains in the picture, it will
be almost impossible for Haarde to start his party and his country
moving towards the EU. 

5.  (C) Other IP members, however, are proving much more open to EU
membership, and are finding support from those who previously stayed
out of the debate.  IP Vice Chair and Minister of Education
Thorgerdur Katrin Gunnarsdottir, though cautioning that she was not
making any sort of leadership challenge, said in a highly publicized
late October interview that the her party had always pledged to take
the most pragmatic stand on EU membership in terms of what was best
for Iceland's interests.  Given that both the global and domestic
economic situation has changed so dramatically in recent months,
Gunnarsdottir continued, it is only logical that the IP reexamine its
stand.  Bjarni Benediktsson, Chair of the Althingi Foreign Affairs
Committee, quickly echoed this argument.  PolOff has heard separately
from IP sources that Benediktsson sees the party's old guard as
standing in the way of not only serious consideration of EU
membership for Iceland, but also Benediktsson's personal ambitions of
a cabinet post. 

6.  (C/NF) Foreign Minister Gisladottir's Social Democratic Alliance
(SDA), however, has become increasingly strident in its calls for
serious exploration of EU membership as well as the dismissal of
Central Bank Chair Oddsson.  Gisladottir said in a press interview
that she is pressing Haarde for a new policy on the EU, and other SDA
ministers have been equally active on this front.  However, to our
knowledge, she has not made the leap to a push for early elections,
though her party would be likely to benefit.  There may be a
practical explanation here, as Gisladottir's recovery from brain
surgery in September has kept her away from work for much of the
tumultuous fall.  Some here also credit her personal relationship
with the Prime Minister as a brake on a move to change the coalition.
 The two party heads have developed an unexpectedly close and
collaborative working relationship and clearly both like and respect
each other. Gisladottir may view Haarde as a useful ally in the
future should she be able to convince him to reexamine the EU
question. 

7.  (C/NF) Most probable, however, is the explanation that
Gisladottir simply does not see a viable alternative to the IP as a
coalition partner at the moment.  The Progressive Party -- Iceland's
only other pro-EU party -- has seen only marginal gains over the last
month, and would in all likelihood still be too small to form a
two-party coalition with the SDA.  The Liberal Party is even smaller,
leaving only the Left-Green Movement.  Although the Left-Greens have
polled significantly higher of late, they still do not endorse EU
membership for Iceland.  Gisladottir seems unwilling to go into
coalition with yet another party that is against joining the EU.
However, as with the IP, the Left-Greens are locked in an internal
struggle over their EU policy; the party's Vice Chair told PolOff
over the summer that she was sympathetic to the growing pro-EU wing
of the party and that she expected a reevaluation of the party's EU
policy by the end of 2008.  This dynamic may be what FM Gisladottir
meant in an interview when she said early elections would be a
distraction to the government now, "but then a new year is coming,
and people will have to assess the situation then." 

COMMENT
------- 

¶8.  (C/NF) In the short term, the Icelandic Government desperately
needs to finalize the $6 billion loan package with the IMF and other
bilateral donors.  If the IMF loan fails to come through, the
government will lose what little remaining credibility it has on the
economic front and may very well find it impossible to stay on.
Despite the protests and the speculation around town, however, we
note that there is little tradition here of disgraced politicians or
governments -- even those convicted of crimes -- resigning from their
posts.  Early elections have not been invoked since the 1960s, and
then only because a three-party coalition dissolved and no
replacement could be created.  No-confidence votes are virtually
unheard of. 

9.  (C/NF) If the IMF loan comes through, a likely scenario is that
after the new year SDA Chair Gisladottir and a group led by IP Vice
Chair Gunnarsdottir present the Prime Minister with their own
ultimatums, both calling for a serious look at EU membership, and
explicitly (SDA) or implicitly (IP) calling for Oddsson's removal.
In any event, a cabinet reshuffle -- either to give the SDA more
power over economic policymaking, to sweep out the IP old guard, or
both -- seems inevitable once the fate of the IMF loan is clear.

Related posts:

1. Situation in Iceland – The Fourfold Dilemma
2. Ross Beaty’s Perilous Situation
3. The Icelandic Situation Now

“Are carbs fattening?” – Agusta Johnsen (Fitness)

Roughly speaking, carbs are either complex or simple.

“God bless the USA” – Lara Bjorg Bjornsdottir (???)

It is my duty as an Icelander who cares about her nation, to visit the US at least twice a year and come back to preach its word. There I learn the latest in manners and customs which I import back home. I teach my girlfriends how to do their make up according to the latest fashion and how to use the right slang in English with the correct accent. Sometimes I bring back medicine which cures the flu in 15 minutes and walk between the sick houses of my girlfriends like Nancy Reagan on Christmas Eve while they smear their children’s forehead with cod liver oil in the weak belief that it will cure them. Right!

“Feminism is not sexy” – Hrefna Ros (Feminism)

I can understand that some women do not want to be likened to a bitter old maiden collecting hair in different places who owns a voodoo doll of all the men in her life, it is not sexy!

“When you’re on a date it is important to know” – Sigridur Bjornsdottir (Dating)

It is important to be the best issue of yourself and then ask yourself, is this a man I am ready to give the chance to make me happy.

“A technical glitz” – Sigrun Bjornsdottir (Dating)

I was once flirting with a boy I liked and sent him an SMS.

“A little bit about wrong price calculations, price indexation and central bank interest rates” – Asgeir Danielsson (Price indexation)

Everybody who has attempted to estimate reasonable CB interest rates in Iceland with the Taylor-rule (for ex. CB specialists and Special Investigation Committee of Althing) have of course used the consumer price index to measure the appropriate inflation.

“Oddballs and the games of happiness” – Unnur Johannesdottir (Child rearing)

So if we want to encourage our children to play outside, according to the seasons it is best that we join them, gather more people and play together.

“Fake it until you make it” – Margret O. Morgan (Female confidence)

I am not saying we all should be like Asdis Ran, but I think that if girls and women would stop beating themselves up all days of the year and tell themselves something constructive then the world would be a better place. I have a dream that Iceland will see the forming of a group of beautiful, smart and strong women who can change the world.

“A role model” – Bubbi Morthens (Privatization)

When Framtakssjodurinn bought Vestia from Landsbankinn in the summer, the purchase was about as unnatural as those things go.

“Has the government’s role play gone stale” – Ingibjorg Thomsen (Low wages for kindergarten teachers)

“No one probably realises the extended result a strike by kindergarten teachers would have. Society would be paralysed in many ways because there is no on or off button”

“Sunday = off day” – Anna Claesen (Family values)

Dear Icelanders, stop the madness and honour the sabbath!

“Mom’s letter” – Gisli Tryggvason (Constitutional reform)

Where neither the law or written material is clear, reasonable logic must prevail.

“Only if the child is healthy” – Herdis Solborg Haraldsdottir (Disabled children)

Lets respect diversity and care for all our children the same

“A poet in hospital” – Hannes Holmsteinn Gissurarson (own book promotion)

“If a story is good, then it is true.” This is not far from the truth.

“What did Steingrimur say about the privatization of Vestia” – Gudlaugur Thor Thordarson (privatization)

The past can not be changed but we can learn from its mistakes.

“Lets guard the government of law” – Bjorn Jon Bragason (Law)

In the recent past, many have been outspoken in condemning those who used to lead the Icelandic business sector. In fact the mass-hysteria is such that many of the nation’s leading businessmen and former bankers can hardly bee seen in public anymore without being harassed. The media participates in this game and many self-appointed moralists have lead the nation to believe that all its main businessmen are criminals.

“Is your child spoiled” – Kolbrun Bjornsdottir (Child rearing)

A child which is handed most things on a silver platter has seldom the chance to develop skills and test personal abilities.

“On feminist cunts” – Bjorg Magnusdottir (Defending feminism)

Feminism is about the equality of the sexes, that men and women enjoy the same opportunities, get the same wages for the same work etc.. Then you can endlessly debate the behaviour of feminism or feminists in current times and past, but in the end it is clear what it is about.

If you like this, then you should check out Pressan.is new site bleikt.is (pink.is) for women which has gone from its inception in December to become one of the most popular webs in Iceland. Today’s headlines:

An original dinner club for singles is a hit (Photos)

The sexiest player in the Icelandic handball squad

Sveinn Andri and Bryndis Gyda on a date (Photos)

Ninety teens pregnant in an American high school

Hot stuff at the single’s ball (Photos)

Arnold’s Photo Section: Maggy

Sex myths and facts

Lets be reasonable with the male chauvinist

Natalie Portman’s unique laugh

The embarrassing photo collection of Keanu Reeves

I am so in love with her

These two popular websites offer an interesting insight into what issues the women of Iceland are emphasising in the most tumultuous times of their nation in several decades.

Possessions, sex and carbs, it is like the business vikings never really left us.  Can we please get the women that Margret Morgan is wishing for instead of this?

Related posts:

1. Crisis – Photos From The Icelandic Ruins
2. Iceland Takes Two Steps To The Left
3. After the crash, Iceland’s women lead the rescue

A seminar at the University of Iceland last semester explained how a research on UK media coverage on Iceland had gone from positive to negative from 2007-2009.

The author concluded that to avoid negative press, Icelanders could manage their PR abroad much better and put a more positive spin on the damning reports.

As opposed to just stop stealing money and bankrupting banks.

Related posts:

1. Hypothetically
2. On Negativity
3. Joseph Stiglitz’s Got The Solution But Lilja Doesn’t Get It

It was whether Iceland could not join NAFTA instead of the EU, unilaterally adopt the dollar and keep its sovereignty intact instead of risking it within the EU. 

Although I presently believe that Iceland’s long term prospects are within the EU as a full member, I have always said that if something better comes along then Iceland should seriously consider that option. 

My answer for kannski.is was a bit long but here is the summary: 

- First of all there is a question of what a nation which hitherto has considered itself European is aiming at with membership in NAFTA and letting go of the EU?

- Secondly the question assumes that Iceland can not stand alone in the world and must either join a multilateral international organization or forge a bi-lateral partnership with a larger nation for economic, human and military security reasons. 

- Thirdly it also assumes that Iceland’s sovereignty would be lost through membership in the EU but not in NAFTA. This is plain wrong as full membership to the EU is only available to sovereign nations. 

- There are two main definitions of sovereignty considered appropriate in modern times and the concept has evolved from the Westphalian kind. One is the capability to conduct a nations internal affairs, and secondly to conduct successful relations with other nations where nations exchange bits of their own sovereignty in exchange for others’ sovereignty.  The second is rarely talked about in Iceland. 

- So why would Iceland want to join either the EU or NAFTA? The issue seems to be first and foremost concentrated in Icelanders’ minds around the Icelandic currency and the public’s and businesses crying out for stability, and freedom of trade for Icelandic exports. 

- The EU and NAFTA are nowhere near similar in any way except that participants in each have sought increased freedom of trade. But whereas NAFTA concentrates on the free trade of goods, the EU goes the extra mile which is probably much underrated in today’s globalized world, providing not only free movement of services but freedom of movement for its citizens.

- Changing currency to lower fluctuations would also not make sense for a nation if it did not change it into the currency it does most of its trade in. Currently, Icelandic exports and imports to the NAFTA area are quite small compared to the business conducted with Europe.

- With full membership the European Central Bank would act as a lender of last resort. The Federal Reserve in the US would not do the same if Iceland unilatirally adopted the dollar.

- The size and influence of the US relative to other NAFTA members is not comparable to any single country in the EU.  People have to think hard about where the power is more spread, in NAFTA or the EU? 

- The last part of the question revolved around the control of natural resources, fish, energy etc. Iceland will simply not join the EU if an agreeable agreement is not reached on such matters. Yet, although much is made of the EU nations eagerly awaiting to get their hands on Iceland’s resources, they should consider whether NAFTA really provides a shelter for such ambitions, or whether Mexican and Canadian fears over US corporations seek to utilize the agreement to get their hands on their oil resources are any better?

The comparisons should be made. Iceland should not blindly head for EU membership without considering other options. But I would argue NAFTA membership and adoption of the dollar is a lesser option, if the goal is security and stability for Icelandic citizens?

Related posts:

1. A Message To Europe!
2. A “Special” Iceland
3. Why Are Things Not Worse In Iceland And Why It Needs The EU?

A year after the crash, reporter Eric Campbell investigates the tragi-comic saga that saw this nation of 310,000 try to become the new Wall Street. He uncovers not just over-confidence and incompetence but widespread corruption.

‘Some of the ministers from the government had very close ties with these banks and this was never really revealed properly. How is it possible that they allowed the Icelandic banking system to grow ten times the size of our GDP? I mean how is that possible unless you have somebody looking the other way in order to make money out of it? – INDEPENDENT MP BIRGITTA JONSDOTTIR

What’s more, it seems authorities in Britain were grossly negligent in allowing Iceland’s banks to suck in billions of dollars from investors in a promotion that also ensnared hundreds of Australian residents.

Tony Shearer, a prominent British financier, reveals how he tried to warn British authorities that an Icelandic bank trying to take over his merchant bank was funded by ‘funny money’.

‘I went to the regulator ,the financial services authority and told them that I thought there were reasons, very good reasons why they should not approve them as fit and proper people to own a UK bank and so did some of my colleagues as well. They approved it.’

Campbell’s investigation shows how officials across the Atlantic failed to heed warnings that could have stopped the financial collapse. And there are worrying signs that little has changed to prevent it happening again.

‘If we don’t make some quite serious structural changes and change the incentives that that produced this destructive behaviour, we are just setting the conditions for a repeat crisis.” – ROBERT WADE

From ABC in Australia. Watch the video here.

This is actually an entertaining take on the financial crisis. You are treated to a preview from Gunnar Sigurdsson’s documentary where Bjorgolfur Thor claims he has nothing to say to those who call him a criminal. Tony Shearer of Singer & Friedlander claim that he discovered that only 10% of Kaupthing’s profits were made from banking but was ignored by the authorities in the UK should be water on the mill of those who claim that Iceland should not bear an insurmountable burden of IceSave in comparison with the UK. Added with scenery, nightlife and protest footage, what you have is a show worth watching.

Funny how interested the Aussies are in the Icelandic crash compared to the US press which is much closer culturally, geographically, politically and economically. Maybe some nations actually don’t want to learn the lessons of the economic crash.

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1. 60 Minutes Australia: Frozen Assets
2. A worthless stamp of approval?
3. FSA was warned not to allow Kaupthing to take over Singer

Like the United States, the banking industries of Britain, Ireland and Iceland brought up the rear, as their financial centres all suffered in the crisis.

Iceland’s banks were ranked the fourth most unsound, rivalled only by Zimbabwe, Mongolia and Ukraine, while Britain was the ninth from last and Ireland the 13th worst.

From AFP

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It is now almost one year since the economic disaster with the accompanying fall of the ISK doubled foreign currency loans and increased price-indexed loans by 20-25%. With rising unemployment and inflation, shrinking purchasing power and a non-existent real estate market, Icelandic households have been hit by an financial catastrophe.

Speaking for my little family of two, all plans have gone out the window. Everyone we know our age (25-33) has been hit hard.

Yet, the “fortress” is nowhere to be seen. Since the government assumed power, Johanna Sigurdardottir has basically disappeared from the scene. Steingrimur J. Sigfusson and Gylfi Magnusson, Finance and Commerce ministers respectively have meanwhile belittled the problems of households by claiming that a debt canceling program for everyone would reward risk takers from the “good times”. This has been echoed by Arni Pall Arnason, who seems like a fish out of water as Minister of Social Affairs in a time when a strong minister is needed.

Now I would like to repeat something I said in a reply to another thread here;

“It is commonly accepted that when negotiating with a bank, the bank has considerable advantage(through knowledge, risk-tolerance etc). I cannot blame people who are not savy in the world of international banking and therefore at a disadvantage when predicting the way currency markets fluctuate.

A 45 million ISK mortgage seems ridiculous right now but in 2005-2007, it was assumed to be “average” for a mortgage(insert; what I meant here is that 45 million ISK could only buy you an average house in Reykjavik and surrounding municipalities). I wholeheartedly agree with you that it is mindblowingly risky to assume this sort of mortgage at that age but the environment contributed to this madness, for better or worse.

What the whole Icelandic debacle tells me is that we had a useless currency that fewer and fewer people trusted and more and more people wanted to escape from. Icelanders are not greedier or more stupid than the citizens of Western Europe or the US for example. We were just living in a make believe economy. A 25 year old is not supposed to know better, neither is someone 15 years older who’s skills lie elsewhere. Those who were supposed to know better (government, financial institutions, media etc) didn’t either or didn’t care.

And for almost a year now, our leaders have been absolutely unable to display any care for the perils of Icelandic households. And it becomes all the more frustrating to hear about massive debt-foregiveness of businesses that have been run into the ground by the very elite that is most to blame for the economic crash.

Now the Household Interest Group is making noise with their proposal of a debt strike on October 1. The group is encouraging borrowers to withold payments on their mortgages for 15 days in October, thereby calling the government to action.

Personally I like the idea and in September my household will consider whether we’ll participate. I realise that a successful action like this could have unprecedented consequences. Imagine a whole nation rebelling against its financial system. It could even deepen the trouble Iceland is in, as the citizens would be declaring a vote of no confidence against the system which depends on trust.

Personally I have no faith in the system. Since I left college I have spent seven years of battling this inhumane system . The capital of ten year loan I took for college which now has reached its sixth year is bigger than it was in the beginning. In three years my mortgage has grown by 25% even though I have paid 25% of the original amount to the bank.

I am reaching the point where I have got to say stop. I do not want to live in a country where price-indexation and an invalid currency enslave me for the rest of my life. If the strike or threat thereof sends a powerful message then I am definitely in.

If it doesn’t then I am most definitely out of here.

Related posts:

1. No To Useless Government “Solution”
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3. Inflation At 16%

Australian 60 Minutes on the Iceland Crisis

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In the build-up to the global crisis of 2008, tiny Iceland was a canary in the mine, a leading indicator of wider vulnerabilities. Now, amid growing optimism about global recovery, Iceland may again be a leading indicator of trouble ahead.

In the space of a few days last October Iceland’s whole banking system collapsed and was taken into public ownership, including the three banks which went from nowhere in 2002 to rank among the world’s 300 biggest by 2007. These three now make it into a less glorious league – Moody’s list of the 11 biggest financial bankruptcies in history. The country’s average income fell from 160 per cent of the US’s in 2007 to 80 per cent this year.

From the Financial Times

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