In the minds of a lot of Icelanders, the most significant piece of news of last week was the offer by the Home Government of the Faroe Islands to extend a loan to Iceland for a total of ISK 6 billion [USD 53 million]. This gesture is amazing, particularly since a] Iceland had not requested the loan, b] the Faroe Islands has a population of around 49,000 people [no, I did not leave out any zeroes]. That is a huge loan per capita. According to a Faroese spokesperson, they simply wanted to show their support for Iceland because, well, they’ve been there and they know what it’s like.
For those who don’t know, the Faroes is a group of islands roughly halfway between the UK and Iceland, between the Norwegian Sea and the North Atlantic Ocean. They are an autonomous colony of Denmark, much as Iceland was from 1874 until 1944, and in many ways have looked to Iceland as an example, particularly when there has been talk of declaring independence from their colonial masters. Icelandic and Faroese are very similar languages, so much that we can understand most of what is said and written in Faroese, and vice versa.
The Faroe Islands experienced economic collapse similar to what Iceland is experiencing now back in the 1990s. According to a column that economist Þorvaldur Gylfason wrote in Fréttablaðið last week, that collapse was largely due to the “deceit, corruption and greed of many of the ‘pillars of society’ who appeared to behave in accordance with the social mores, even though laws were clearly violated, but which few people seemed to make a big deal about.” He goes on to trace the similarities between these two circumstances. In the end, Denmark ended up loaning the Faroese some exorbitant amount, equivalent to some ISK 3.7 million per Faroese citizen – which is somewhere around the debt figure that is being cited for each Icelandic individual at present. The good news is that the Faroese managed to pay that debt back, with interest, within ten years. Moreover, the country’s GDP reached its former 1993 levels by 2001.
This gesture of friendship and goodwill by the Faroese has profoundly touched the heartstrings of the Icelandic nation. Blogs buzzed about it, MPs enthused about it in parliament, a Facebook group was opened for Icelanders to express their gratitude, letters of thanks from Icelanders poured by the hundreds to the Faroe Islands newspaper Dimmalætting, and Bifröst University in Iceland has offered free tuition for two Faroese students next year. Even YT got all teary reading excerpts from some of the letters sent to Dimmalætting and declared to EPI that my mission for next year is to go to the Faroe Islands and personally throw my arms around each and every Faroese citizen. They say that Icelanders have short memory spans [particularly when it comes to the corrupt antics of their politicians] but I am positive this gesture will be remembered for years to come.
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In other news.
It may interest you to read the results of my little poll from last week.
The first poll, “Would you subscribe to a news forum on this website”, drew 225 votes. Of those, 44 percent, or 100 people, voted NO; 33 percent, or 75 people, voted YES; and 22 percent, or 50 people, voted NOT SURE.
The second poll, “If you voted YES … maximum amount yadayada”, drew 81 votes [slightly surprising in light of the fact that only 75 people voted YES in the previous poll, but who's counting?]. Of those, 94 percent, or 76 people, voted for the lower amount [14.99] and six percent [five people] voted for the middle amount [24.99].
So based on that information and the criteria I had set for myself, it would actually be viable for me to launch this thing. Whether I want to is another story and requires a fair bit of soul-searching. But, again, I really want to thank all of you who voted and especially those who pitched in with ideas. They were all excellent and I shall definitely be giving them some very serious consideration.
IT WAS A PRETTY NICE DAY TODAY*
EPI and I headed down to the demonstration, which drew over 1,000 people and which was … um, interesting. OK, I have to be honest and say that I’m a bit put off by all the special-interest groups that want to jump on this demonstration bandwagon. All the old communists [I don't mean that as a swearword] and anarchists and those oh-so annoying truckers who totally used up all their demonstration goodwill earlier in the year and who saw an opportunity to come out today in their monster trucks and blow their horns for the sake of some nebulous cause. Ach. Anyway. I do think it’s important to show up and just be there and be counted, to demonstrate that we’re not totally complacent and we do want change, but these demonstrations are, sad to say, becoming more unfocused and less targeted with each passing week. Which just isn’t helping anybody. After that, however, we wandered around town, into the IÐA bookstore and went upstairs to the Sushi train, where they serve sushi on a conveyor belt. We ate some of that and had some green tea, then wandered back home. I was particularly heartened to see how many people were out and about [the bookstore was so full you could hardly turn around without bumping into people] who largely seemed to be in good spirits, despite the dark day that was yesterday, what with all the layoffs. Temp currently 4°C [39F], sunrise was at 9.12 am, sunset at 5.09 pm.
* Or, well, yesterday, since I’m posting this past midnight.
{ 27 comments… read them below or add one }
I’ve noticed the same thing with big protests here in the States. It used to be that people just marched against a specific cause (like, say, our stupid war in Iraq), but now protests have devolved into a mishmash of unrelated and often conflicting causes. It really dilutes the message!
Yay for the Faroese! Thanks for sharing some thing heartwarming– we sure could use it. I don’t know much about the Faroe Islands, but I do have a CD by two Faroese called Villu Veski and Tiit Kalluste called
Pöhjala saarte häälad II, and it’s a cool mix of local folk and jazz. Here’s a plug for them as a small gesture!!
What a wonderful gesture from Færøy! If nations could hug, this is what you would get.
Valerie, those names/words didn’t look Faroese, so I checked. The duo is from Estonia. But I’m sure they wouldn’t mind being honorary Faroese at this time.
How touching. How did they pay off their loan so quickly though? Surely each Faroese cannot earn 3.7 million in 10 years?
Alda, just a small addition to the relation between Denmark and the Faroes, they are in the same steps as Iceland was between 1904 and 1918, having a home government but still a part of the Danish state. Iceland became independent of Denmark in 1918, sharing a king with Denmark (similar to the connection between the UK and Canada today). The Faroese are a Most Favoured Nation here in Iceland at the moment (having always had a close relationship with Iceland through the centuries, almost speaking the same language) being offered discounts in stores etc.
meloukhia – it’s very annoying, isn’t it?
Valerie – indeed, we need all the good news we can get these days.
Keera – well put!
Marmite lover – it’s a symbolic figure … it just means the GDP grew enough so that it’s the equivalent of each Faroese paying 3.7 million.
Sigvaldi – takk!
You said it–friends in deed. And the Faroe Islands’ offer should put other larger, richer nations and groups of nations to shame.
Sidenote: I’m sure most Americans have never even heard of the Faroe Islands. I am aware of their existence and location, but I have to admit I had no idea the total population was only 49,000. That makes the offer all the more amazing.
I’ve been wondering what’s going on with that loan offer from Russia. (I’m not pressuring you to write about it, though–I’m sure it’s a very complex issue.)
The Faroe Island’s PM said they aren’t charging Iceland any interest on the new loan – and that “it is incredibly unjust to invoke anti-terrorism legislation against a peace-loving nation that hasn’t killed anything but fish”…
Rozanne – supposedly talks are ongoing for the Russian loan – we’re getting very little information about it. There was some talk that a loan from the IMF was a precondition for the Russians, so perhaps that’s what’s been holding it up.
James – see? How can you NOT love the Faroese?
I wouldn’t love the Faroese if I were a whale.
From what I understand the russians extending a loan to Iceland has roused some other countries, who would have been pressurising Iceland not to accept a conditional loan, with the promise they would be granted some loans from other countries instead. It sounded likely enough to believe it, though I’m sure in diplomatic language things weren’t put as candidly as this.
It’s curtainly very nice of the Faroe Islands – which isn’t even a country!
Here’s an article in The Observer (politically to the left) – the Sunday version of The Guardian. Would you agree with the sentiments expressed by the Icelanders quoted?
http://www.guardian.co.uk/world/2008/nov/02/iceland-recession
And talking of bookstores, this piece is gloomy:
“The writer, who has three small children, enjoys the good fortune of having almost paid off his mortgage. Yet he does not consider himself to be safe. On the one hand, his wife risks losing her job in an organisation which depends for its existence on the sponsorship of an Icelandic bank. On the other hand, because of the worrying economic prospects his publishers have told him they cannot afford to print three books he has written, and that they had commissioned. What is more, there are signs that the biggest book-selling chain in Iceland could go under, which could have a catastrophic effect on the biggest publisher. ‘And all this,’ the writer says, ‘in a country where, until now, individuals have been buying more books than anywhere else!’”
“‘The party’s over,’ said the writer whose books the publishers cannot afford to print. ‘I’ll tell my children one day about the drunken nights of champagne excess the young bankers used to indulge in, and they’ll think I’m making it up.’”
Hi Alda,
That’s great about the Faroe Islands. I didn’t realize their population was up to 49,000. I hope Denmark steps up with some tangible help. I live in Boise, Idaho, so it’s hard to stay up to date. Good luck in resisting the aluminum plants.
Best wishes,
Aage
I forgot to mention that I met some very nice faroese when I was in Iceland a few years ago.
Marc, Norwegian newspapers have suggested that Nordic financial support for Iceland was motivated by the Russian loan offer. IOW, keep the Russians out.
Yes, well, the protests can be expected to peter off as the nutrition situation worsens.
I can’t believe the Icelanders won’t depose their prime minister and president. These men are patently sleazy. What’s worse is that they’re plainly incompetent. But nothing will be done.
Here’s how I see it going down. The IMF loan will never come through. The Faroese loan will, of course, do nothing, even though it was ever so sweet.
Imports will peter out and cease, if they haven’t already. Shortages will occur sporadically and they’ll effect single products. Other products will be in abundance for a lot longer.
The Central Bank will wearily concede that it’s bankrupt. Thousands of people will default on their debt. Credit cards won’t work anymore. People on the streets, you’ll notice, will look a little malnourished and hopeless.
Things will get worse and worse. At a certain critical moment, the government will disappear. It will leave, like the bankers did.
Dear Alda, EPI, AAH et al. I have been preoccupied elsewhere in the last couple of months of world chaos (nothing to do with money, thank god) and have only been able to catch up with your excellent blog today.
Alda, you have earned the right from years of most entertaining and informative reporting to do just what you want with YOUR blog. If generating income by opening a subscription service will help your finances, count me in.
By terrible misfortune, the non-niceland world has in you a literate and sensitive reporter who can tell us all what it is really like when our nightmares come true and a western economy collapses.
Hazel and I have fond memories of visits to niceland and assure you that not all brits are agin you.
KUTGW
dave and hazel
Penn, we´ll see about the IMF loan later this week but the nutrition situation is the least of our worries, Iceland is a food exporter and the food imports are ca 30% of the total consumption.
The value of imports have decreased sharply over the last couple of months and the export value is now much greater than the imports so the currency situation is likely to right itself much sooner than you think.
As for the PM and the central bank, that will come later.
Andrew – thanks for the link and yes, I would agree with most of those sentiments. It’s a pretty good article although, like most in the foreign press, it focuses primarily on the gloom and doom and not on the good stories that are definitely also to be found.
Dave – hi, good to ‘see’ you again. Thank you for your warm words and support, they are very much much appreciated.
Alda, thank you for this post. This was a beautiful thing for the Faorese people to do, and a good example for the rest of the world.
A few years ago, when Faroese independence talks with Denmark broke down because they couldn’t agree on the size of a subsidy (if I recall correctly), I was reminded me of that line from Björk: “I thought I could organise freedom/How Scandinavian of me”.
But sadly, like the US, the politicians will all retire and the bankers will get huge pensions and nobody but the people will suffer. Why do the ‘big guys’ always seem to get away with things like this? Maybe the old days of lynching or tar and feathering should be reinstated.
Sigvaldi – Good luck replacing a third of your food supply with home-grown supplies. I suppose the government has planned how to do this? Of course not. It says and does nothing of substance.
The currency would right itself if there was a stable exchange rate for the krona. There isn’t one, as far as I can tell. This is a problem for both imports and exports.
I suggest you get rid of the PM and the bankers sooner rather than later. They might be humble and defensive in this crisis, but they’re still predators.
@ Penn. You are not wrong in saying that Iceland has a problem with its exchange rates and with the amount of food that needs to be imported. I expect that the icelandic central bank will realise sooner rather than later that stubbornly trying to hold on to an exchange rate of around 160 ISK/€ is damaging the economy irreparably if on the free market the rates are close to 300 ISK/€. Also, you may find that the adaptability of humans is far greater than you could possibly imagine. When I was young and money ran out, we used to eat cheap food like potatoes and onions, lentils, beans etc. Good recipes get you through difficult times. The political leadership problem needs to be addressed. I read an article last week (of the IMF) that suggested that the main success factor in dealing with an economic crisis is the early and decisive action by the government. The media ownership concentration as mentioned in the news headlines above is a threat to your democracy, as it moves Iceland in the direction of Russia, Italy, etc. Not democracy templates to be copied, I’m sure you agree. Unfortunately I do not have ready made advice for such situations. I guess it depends on the structures of the country and the character of the people how to fight this. I don’t know how influential Bjork is, but she talks sensibly, I think. Maybe she can spark a different dynamic in Iceland. Iceland is in my thoughts.
Has anyone thought that the Faroese might have an ulterior motive? They have a small population and lose a lot of people, especially the younger educated ones to the mainland (i.e. Denmark). Wouldn’t they like to have another 20,000 people. i.e. folks leaving Iceland ? The Faroese probably get payment from the Danes for each head, so the more the merrier. They would get people who speak a similar language and might be glad to have a refuge. To be honest, living in the sleepy Faroes looks a lot better than in broke and bitter Iceland.
Just asking
Has anyone thought that the Faroese might have an ulterior motive? They have a small population and lose a lot of people, especially the younger educated ones to the mainland (i.e. Denmark). Wouldn’t they like to have another 20,000 people. i.e. folks leaving Iceland ? The Faroese probably get payment from the Danes for each head, so the more the merrier. They would get people who speak a similar language and might be glad to have a refuge. To be honest, living in the sleepy Faroes looks a lot better than in broke and bitter Iceland.
I’m just asking — I don’t want to get any Faroese angry at me.
Rozanne – I’m sure most Americans have never even heard of the Faroe Islands.
I know someone going to the Faroes who ended up with a booking to Portugal instead.
Bless the Faroese as true humanitarians! I’d never heard of them before, but now I want to fill their homes with roses and balloons, festoon them with medal-ribbons and build a mighty monument.
As said before, I do hope you can stay clear of the evil IMF/World Bank wrecking crew. If they get hooks into you, they’ll turn the whole country over to international profiteers.
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