Payday!

by alda on November 10, 2014

As I have written about in this space before, the current government was elected pretty much on one promise: that they would relieve the debt burden of households whose mortgages had skyrocketed as a result of the economic meltdown.

protests Iceland

From the demonstration on Austurvöllur last week. Photo mbl.is / Júlíus Sigurjónsson

They have been dragging their feet with this debt write-off [while wasting no time with removing taxes on the rich], and it is looking a whole lot more puny than originally promised. The government’s plan was to tax the hedge funds that have Icelandic krónur locked in the country as a result of capital controls; however, a few months after the election came the announcement that – sorry! – that would not be possible. Instead, the amount promised for the entire write-off package was about a third of the original plan, AND Icelandic taxpayers would have to foot the bill. *shrug c’est la vie* [or something].

WELL, as it happens, it has been announced that today is the day when the scope of the debt relief will be announced, including how much each individual gets. IT’S PAYDAY, FOLKS!

It’s an odd thing that this announcement is being made on the very same day that the second in a series of protests is set to take place on Austurvöllur square. On Monday last week, somewhere between 4,500 and 6,000 people turned out to demonstrate their dissatisfaction with the government’s actions, which are both varied and extensive.

The debt announcement will be made at 1.30 pm. The demonstration is set for 5 pm. It will be interesting to see whether the former has any impact on the latter – for better or for worse.

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The list goes on

by alda on November 3, 2014

In a post I wrote last week I alluded to the growing anger in Icelandic society over the actions or non-actions of our current government. I also wondered whether the subservient mentality left over from our colonial days was causing Icelanders to simply take all the insults and injuries handed to them and shuffle on, serf-like, pretending nothing had happened.

trustWell, I am happy to say that in the interim there has been a rally for protests, and a demonstration will be held at 5 pm this afternoon in Austurvöllur square, in front of the parliament buildings. As I write this, 6,000 people have joined the event on Facebook, which is more than I recall any of the other demonstrations getting prior to the event.

 

In last week’s post I made a list of some of the reasons for this widespread public dissatisfaction, which I had to abandon halfway because the post had gone on for too long. I said I would add to it, so here, without further ado, is a continuation:

11.

In its current budget proposal, the government claims it wants to “simplify” the VAT system. It proposes to do this by lowering the higher of two VAT brackets to 24% from 25.5% previously and to raise the lower tax bracket from 7% to 12%. That lower tax bracket covers essentials like food. In other words, the tax on many non-essentials goes down, while the tax on essentials goes up. At the same time the government proposes  to do away with tariffs on higher-priced goods such as flat-screen TVs, which will decrease in price by 25%. Using some weird accounting logic that nobody understands, our rulers are adamant that this will increase the spending power of regular households.

12.

As our fearless leaders raise VAT on food, they abolish a tax on sugar that the previous administration had implemented. Ergo: healthy foods like fruits and vegetables go up, unhealthy foods like soft drinks and candy go down.

13.

Iceland is losing doctors at a rate of 66 per year. As this is written, doctors are on their first strike ever in the history of this country. The National Hospital and health care system are being consistently hollowed out from the inside. In the midst of this calamity it is announced that a private health care facility is on the drawing board in Kópavogur. Indeed, the trend has been all in this direction: systematically weaken or destroy public services, and then ride in on a white horse to the rescue with privatized “solutions”.

14.

When our fearless leaders presented their new budget proposal, their calculations revealed that, in their view, a meal does not need to cost more than ISK 248. That does not even buy a cup of coffee in a downtown coffee shop. If we were made to subsist on ISK 744 per day [three meals daily] we would all be severely malnourished. But that does not seem to concern the leaders of this land, most of whom who have no idea what it is like to have to pinch and save. Their disregard for the working people of this country is astonishing, to say nothing of the elderly or disabled. “Let them eat cake,” etc.

15.

About a week ago the government announced that it planned to scrap education departments for mature students throughout Iceland. In other words, adults over 25 who did not finish high school and want to do so can’t, unless they are prepared to pony up hefty fees for private education [last time I checked people who did not finish high school were not exactly rolling in dosh]. Again, we see the trend towards debilitated public services and privatized “solutions”.

16.

Then there is the small matter of the leak. Several months ago, it came to light that the Ministry of Justice had leaked personal information about an asylum seeker to the media, evidently in order to justify their own decision to deport him. The story broke on the media outlet DV, which refused to let the matter drop, even though the ministry did everything to try and dismiss the matter as trivial hearsay. The minister and her assistants were later caught lying to the media, becoming ever-more enmeshed in their own web of deceit. Eventually a police investigation was launched, and the parliamentary ombudsman became involved. The minister was livid, and summoned the chief of police to her office. There, using intimidation and threats, she tried to meddle in the investigation, causing the chief of police, who was very popular with the public, to resign. Eventually the minister’s assistant was formally charged with breach of confidence in public office. I think it is safe to say that in any other democratic country, a minister whose closest assistant had been charged with a crime would have taken political responsibility and resigned. Not so in Iceland. Any suggestions to that effect have been met with arrogance and a “I did not do anything wrong so why should I resign” stance.

17.

This week it came to light that the Chairman of the Board of the Financial Supervisory Authority had been involved in some pretty shady dealings when she worked for Íslandsbanki back in 2011. The bank brought charges against her when she left its employ. Despite this stellar track record, the Independence Party appointed her Chairman of the Board of the FSA last December – the very government body that is supposed to prevent the sorts of dealings that she, herself, was involved in.

18.

A couple of weeks ago the company MS, Iceland’s largest dairy producer, was fined ISK 370 million for abusing its strong market position. And yeah, its market position is pretty strong, by virtue of it having had a monopoly on milk sales in Iceland for several decades. MS is exempt from competition laws, which is a political decision. Over the last ten years or so it has employed mafia-like tactics to bankrupt at least two small start-ups in the milk industry. This form of bullying by MS has gone on for decades against smaller companies to [successfully] force them out of business. Mind you, the current coalition parties cannot be held solely responsible for this, since it has been going on for longer than this election term. But this is the sort of Soviet-like climate that exists in certain pockets of this society, to help the rich get richer.

19.

A couple of weeks ago it was revealed that 200 machine guns and pistols were purchased from Norway for regular police officers to keep in their patrol cars. Until now, Icelandic police officers have been unarmed, though there is a special squad trained to deal with crisis situations. Icelandic authorities dismissed the report as inaccurate, saying that the guns were a “gift” and that there were moreover 150 of them, not 200. The Norwegian Army later confirmed that 250 machine guns were sold to Iceland, at the behest of the Icelandic Coast Guard. No debate or discussion about this very radical change in policy for Icelandic law enforcement took place. One has to infer that the intention was to arm the police force in secret. Why? On top of this, it came to light a couple of days ago Coast Guard imported the weapons illegally, without the involvement of customs officials. Why? And why can’t Icelandic authorities tell the truth?

20.

The media landscape in Iceland could easily be the subject of its own lengthy post. As we all know, a free and independent media is one of the cornerstones of democracy, and corrupt powers in society repeatedly seek to have control of that same media. Of the three major newspapers in Iceland, two of them – Morgunblaðið and Fréttablaðið – are blatantly designed to serve the interests of their owners. The third, DV, was independent and did some investigative reporting until August of this year [see item 16, above]. Long story short, something like a hostile takeover took place, involving a well-known businessman here in Iceland whose shady dealings had been repeatedly exposed by the paper. There were others involved as well, who at the time were not revealed. Now, two months later, rumours abound that individuals with ties to the Progressive Party are those who took over paper; in any event it seems that it will soon be merged with other media affiliated with the PP.

~ That’s ten more added to my list, and I could go on – but this post has now gone on even longer than the first and I trust you get the picture. Remember Austurvöllur today at 5 GMT, and if you can’t get there, there is always webcam.

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[Photo EPA/SIGURDUR J. OLAFSSON]

With impunity

by alda on October 27, 2014

Recently I posted some musings on Facebook, wondering whether the Icelanders of today were much like the Icelanders of old under the oppressive heel of our former colonizers. It often seems to me that the people of this country choose blindness over sight, letting a certain segment of society [read: the elite] perform increasingly outrageous acts with complete impunity. And I’m sure most of us know what happens in cases like these – once you let someone violate your ethical boundaries a little, it is easier for them to go a little further the next time. And so on.

Iceland politics

Our fearless leader, PM Sigmundur Davíð Gunnlaugsson

At least one commenter seemed indignant that I should make this suggestion. In his view, Icelanders cannot be oppressed because members of his family in Iceland drive 4×4’s and travel abroad with regularity.

I shall leave it to you to assess the validity of that argument.

I do not consider myself a pessimist, but I find the developments in this country very alarming. In my view, it is difficult to adequately understand the nature of what is happening here without actually living in Iceland and seeing/hearing/reading about individual instances as they happen. Things seem to be surfacing pretty much on a daily basis, and it’s hard to keep on top of things. So for my own benefit and anyone else’s who may be interested I decided to put together a quick list.

1.

People wonder how on earth the current government got (re-)elected in the first place. It happened basically on the strength of one promise: to correct the debt burden of regular households, which I wrote about here. This was no small undertaking and was estimated to cost a shitload of dosh, or 200-something billion ISK. Naturally they were grilled pre-election on how exactly they planned to raise that money. Their response was that they would do so by taxing foreigners who owned ISK that was trapped inside Iceland because of capital controls. Hedge funds and such. To me and many others this seemed totally far-fetched and ridiculous. But lots of people bought into their rhetoric, probably because they were desperate.

2.

So the Progressive Party won the election and entered into a coalition with the Independence Party. And their voters waited for their debt relief. But oh, suddenly it was no longer very high on the agenda. The first order of business, it seemed, was to abolish a tax the previous government had levied on the fishing moguls. Now, these fishing moguls have grown immensely wealthy exploiting a resource that is owned by all Icelanders – the fish that swims around in the sea in our legal jurisdiction. Not everyone can go out and fish, you see. To do so you have to have a fishing quota, allocated to you by the government. This allows you to catch the fish and sell for a high profit, which you, yourself, pocket [and possibly shift to an offshore bank account]. Needless to say, the biggest fishing quotas are allocated to companies that – by some strange coincidence – support the IP and PP. The previous government, hoping to relieve some of the effects of the economic meltdown, had placed a very moderate tax on the quota owners, so that we – THE OWNERS OF THE RESOURCE – should get some of the profits. But no – within a few short weeks of being voted into office, the IP and PP coalition abolished that tax.

3.

After months of the little people waiting for their debt relief, the government announced that, unfortunately, they would not be able to follow through on their original plan to tax the hedge funds. It simply wouldn’t work. Meanwhile, the package that was supposed to be worth some ISK 200+ billion was slashed to ISK 80 billion. And that 80 billion would come out of the state treasury – i.e. be paid by the Icelandic taxpayers. To add insult to injury, it was calculated that this debt relief package would [will] boost inflation to such a degree that, in the end, it will be worthless. It will be eaten up by higher prices.

4.

Within weeks of taking office, the government abolished the Ministry of the Environment. Under the previous administration the ministry was held by the Left-Green party, which went out on a limb to protect natural areas. This caused much resentment in the IP and PP camps, who seem to want nothing more than to harness every geothermal area and waterfall in the country in order to attract more heavy industry, despite the fact that such industry has been shown not only to have catastrophic environmental effects, but also to make no economic sense in the long term. [Update: It was brought to my attention that nothing has as yet happened regarding the Ministry for the Environment – i.e. the “abolishing” has still not been executed, though it was discussed at length shortly after the election. Apologies for the error.]

5.

Digressing into the present for a moment, just recently the IP has been proposing to privatize The National Power Company – Landsvirkjun, in order to raise money for things that could have been covered by, say, the fishing tax. The discussion is already underway. I cannot stress this enough: it would be a catastrophe. Like selling your only milk cow. [Imagine, say, if the Norwegians were to privatize all of Statoil. It would be like that.] Green energy is Iceland’s greatest economic hope right now. The privatization track record of the IP and PP, meanwhile, is dark and messy and corrupt – and ultimately in their own interests. Naturally.

6.

Pre-election, the IP and PP, who are notoriously opposed to Iceland joining the EU, promised they would not scrap the EU accession talks begun by the last government. They also promised us, the people, a referendum on whether or not accession talks would be continued. Post-election, however, the government set about scrapping accession talks, with NO mention of a referendum. When this prompted loud protests and demonstrations reminiscent of 2009 [which brought down the government at that time], they decided not to scrap accession talks outright but to “put them on hold”. However, that referendum they promised us will almost certainly not be held during this election term. The IP has said as much.

7.

Soon after taking office, the PP began criticizing RÚV [state broadcaster, and the only financially stable independent media outlet in the country] for being “too negative” – i.e. reporting on their actions [such as the broken EU-referendum promise] without any cosmetic tinkering. The head of the state’s budget committee – a PP member – went so far as to make veiled threats that RÚV’s budget would be slashed substantially. This was not long in coming – a couple of months later RÚV was forced to lay off around 60 people due to budget cuts.

8.

Pre-election, it was pretty clear that funding to the Special Prosecutor’s Office – which was set up to investigate criminal offences that led to the meltdown – would be slashed. We knew this because so many of those under investigation had close ties to the IP and PP. Sure enough, this has happened. The Special Prosecutor’s Office will pretty much be toast by the end of this year. Mind you, I cannot say for sure whether this is warranted or not, since the cases the SPO has been bringing to court have almost always ended in acquittal for the bigshots. Those who know more about this than I do claim that the law is simply so wide in scope that it is very hard to convict people for economic violations – I’m not well enough informed to know whether that is true or not.

9.

Having said that, while the bankers walk, a group of protestors, comprised largely of senior citizens, were recently convicted for protesting the destruction of a lava field that has great natural and historical value. Their crime consisted of refusing to move when the bulldozers set in to crush the lava to make way for a new road. This was despite the fact that a ruling had not yet been made which would determine whether or not the construction was, in fact, legal. Police handcuffed the demonstrators and carried them away by force.

10.

A revision of the constitution which was set in motion by the previous government and which garnered worldwide attention for its direct-democratic approach has been shoved into the deepest, darkest drawer possible and will probably not see daylight during this election term.

~ Crikey, I’m already well past 1000 words with this post and I’m not even halfway through my “quick list”. Ok, this will have to do for the moment, but will be continued in the next post. In the meantime, remember to sign up for email updates, or to join the conversation on Facebook.

A milestone

by alda on October 20, 2014

Today, October 20, it is ten years since I started this blog.

I just realized this.

birthday_candles

So I thought I’d take a quick jog down memory lane. In October 2004 I was, um, ten years younger than today. I had written a novel that got picked up by an agent in London but which failed to sell to a major industry publisher. [This was in the days when you needed the vetting of The Industry and its Gatekeepers to get your work in front of the reading public and oh HOW I DO NOT MISS THOSE DAYS.]

Anyway, I was feeling a little blue about this. I’d spent all this time on that manuscript and for what? [… was my state of mind.] I was never going to write another book. F*ck that.

But I had this annoying habit. I had to be writing all the time. And there was this new thing – this relatively new thing – called a blog. I loved what people were writing. I loved this blog in particular. And I thought … maybe this could be my new thing too.

So I started. First, of course, was to choose a subject and a name. The subject was easy: just write all the drivel that came into my head. The name took a little longer, but when I sat down and started thinking about it, it was easy too. Here is the story about the name.

At first, the blog was hosted on Blogspot and looked like this. [Ahh, I get a big hit of nostalgia looking at that old site.] Life was good in those days. There were lots of funny and talented people blogging, we had blogrolls [remember those?], we commented on each other’s posts. There were the popular kids and the not-so popular kids, and the popular kids only commented on the blogs of the other popular kids while the not-so popular kids  yearned to be “in” with them … come to think of it, yeah, it was a little like high school.

But then the blog grew up and moved to its own pad under its own domain name. And that’s when shit started to get real. Like, we had this whole meltdown situation here on the ice cube. Whereas before my blog had featured blithe little posts about Yule Lads and trips to Penis Mall, we were suddenly in the midst of this economic disaster as a nation. And blogging about the same stuff as before had become impossible.

But I was still blogging about the stuff that was in my head, and that stuff was all about the meltdown. And lo. It turned out that everyone’s eyes were on Iceland, and the world was hungry for information about what was going down there. That information was not readily available in English, but there was some semblance of it on my blog. And so the blog started to get hits. People were reading. Big international media outlets. And some people within Iceland, too.

Soon I was being invited to conferences abroad to talk about the Icelandic situation. The BBC came to my house and did a segment about me writing the blog. I was getting enquiries and invitations constantly to meet journalists for coffee or dinner, to be on radio shows or TV. I had unwittingly become Iceland’s information officer – on a volunteer basis.

But the most rewarding thing [and also the most difficult thing, because some people were really nasty] was having conversations with people on the blog. One question that kept coming up constantly was: how is the meltdown affecting regular people? People like you, or your family, or your neighbours? The media was reporting the big picture – the political, economic, financial situations. But very few were talking about the little people.

And so I wrote a book. [Yep, I know I was never going to write a book again, but … I did.] It was called Living Inside the Meltdown, and it was a series of interviews with people about how the economic collapse had affected them. I published it as an ebook through this website. It did reasonably well. Next I wrote another book, one I had been thinking about for some time. I was called The Little Book of the Icelanders. That one did even better.

Long story short, I have published three more books, and another one is on the way. I tried working with a legacy publisher here in Iceland but it was not a very satisfying experience, so I have gone back to indie. And I love it.

I stopped blogging in 2010. It was taking up an increasing amount of my time, severely impacting my life, and I just couldn’t do it any more. I was burned out. People were constantly asking me to meet them for coffee so they could pump me for information, and I hated having to say no all the time. But I needed to invest my energy into something that would bring me remuneration correspondent to the work I was doing.

I did keep updating the blog’s Facebook page, though, because I had a hard time shutting up completely. It became a sort of “IWR light” and was manageable for me. That page is still going strong.

Ten years ago when I wrote that first post about my dirty kitchen window I could not have imagined what that small step would lead to. But it turns out I was unwittingly moving into a new era, in more ways than one.

[pic found here]

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Over the last two evenings, current affairs programme Kastljós has run an excellent report exposing a long-term price-fixing scheme between the two main shipping companies in Iceland – Eimskip and Samskip. The findings came in the wake of a raid by the Competition Authority on the offices of the two companies several months ago.

Iceland is a country that produces very little in the form of food or material goods. It is moreover an island. Consequently it is heavily dependent on shipping. Practically everything here is imported, and a large portion – if not most – of the goods are brought in by ship. Through their illicit scheme, those two companies have robbed the people of this nation of vast amounts of money, since the price of shipping that they collaborated to keep as high as possible gets funnelled into retail prices.

Sadly, by now we Icelanders have gotten used to this, as a scandal of this nature gets exposed every few years. The problem with living in a society as tiny as ours is that healthy competition tends to be a challenge – the market is simply not large enough to support numerous companies in the same sector.

Iceland government leadersThe other issue brought to light by the Kastljós report, which to my mind is far more insidious and frightening than this particular price-fixing scheme, is that the current government is now making overtures to abolish the Competition Authority as an independent body, planning instead to merge it with two other regulatory bodies. This would, of course, seriously impact its effectiveness. Which is no doubt what the government wants.

This comes in the wake of many other such “measures” by the government. Very soon after coming to power they did away with the Ministry for the Environment, no doubt to silence any pesky nagging about the use of natural resources. Last year there were major cuts to RÚV, the State Broadcaster, which among other things runs Kastljós. As some people may remember this came after overt and covert threats made by certain members of the government who were upset by RÚV’s reporting on issues that showed them in a negative light. Another, more recent, action was to slash the budget of the Special Prosecutor, an office set up to investigate crimes in connection with the economic meltdown. Granted, this came as no surprise – it was a given that this government would do this. After all, the two parties now in power are responsible for creating the conditions that led to the economic meltdown, which is still wreaking havoc in the lives of innocent people. It goes without saying that they are not keen to have this investigated.

It is six short years since this country was brought to its knees by the catastrophe that was the meltdown. It occurred largely because regulatory bodies failed – they had been abolished or rendered impotent through actions taken by the then-government. Suffice it to mention the dismantling of the National Economic Institute in 2002. It was issuing serious warnings about the government’s economic policies at the time and was simply done away with by then-prime minister Davíð Oddsson – he who today works diligently to rewrite history as editor-in-chief of Morgunblather Morgunblaðið, one of Iceland’s two daily newspapers. He wished to continue implementing his actions without the “negative” analysis by the regulator.

This present government seems bent on doing exactly the same thing – but even more meticulously and systematically. Gylfi Magnússon, an economics professor at the University of Iceland and Minister of Finance in the last government, was quoted in Kastljós as saying that the Competition Authority had saved the Icelandic nation approximately ISK 100 billion over the last eight years through its powerful regulatory practices. This is based on calculations that he prepared at the behest of the Authority. ISK 100 billion is a shitload of dosh, and the current government knows this. By abolishing the Authority, that money could potentially be going into the pockets of their relatives and cronies. I’ll say no more.

UPDATE: It was brought to my attention that the price-fixing scheme referred to in this article has not yet gone to court, so as yet we are talking about alleged price fixing. The CEOs of the two companies in question have been indicted by the Special Prosecutor’s Office, yet vehemently deny the charges. My apologies for the error.

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Six years on: God bless Iceland

October 6, 2014

Today it is six years since then-Prime Minister Geir Haarde* appeared before the Icelandic nation and delivered his “God bless Iceland” speech, in which he told us, in very circumspect language, that this country was completely screwed. It was a terrifying day. Everyone had their own reaction to the speech: some people wept, some [like me] were […]

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Iceland, six years after the meltdown

September 29, 2014

Six years ago today, my bank, Glitnir, collapsed. It was a regular Monday. EPI and I had just returned from a holiday abroad the night before, he had gone to work, and I was at home unpacking the suitcases. At around 9 am he called me and told me that Glitnir had gone bankrupt. I was speechless. […]

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What is happening in Bárðarbunga – in layman’s terms

September 7, 2014

The Icelandic National Broadcasting Service [RÚV] recently had an excellent and easy to understand explanation of the forces at work in Bárðarbunga, the caldera beneath Vatnajökull glacier that has been repeatedly mentioned in connection with the current eruption in Holuhraun. I’ve taken the liberty of translating it for the edification of those who don’t speak Icelandic and perhaps […]

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Grave developments on the Icelandic media market

August 27, 2014

As most people are aware, a free and independent media is one of the four cornerstones of democracy. Therefore when serious struggles for control of the media occur it is definitely a cause for alarm. When the economic meltdown took place in 2008, many of us were shocked to realize that much of the madness and corruption that had […]

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On the supposed superiority of Icelandic produce

August 15, 2014

There is a subject close to my heart that I have occasionally considered posting about, and since the discussion has recently arisen on our Facebook page, I figured this was as good a time as any. It concerns the supposed superiority of Icelandic produce, and this image of Iceland as somehow pure and untainted in all things […]

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