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

by alda on 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 numb, some were furious.

geir1

I used this scene in my book Unraveled, in which I write about the meltdown as a backdrop to the unraveling of the relationship between my protagonist and her British ambassador husband. Here’s Fríða, and her specific reaction:

 

Geir Haarde was on the screen before her, looking grave, his skin pasty. “Gódir Íslendingar” – he began, “Good Icelanders. I have requested an opportunity to address you at this time, as the Icelandic nation is facing great difficulties. The world is currently a experiencing a serious financial crisis, so serious that its effect on the global banking system is catastrophic …”

Frida listened, her eyes glued to the screen. The Icelandic banks had not been exempt from this predicament, Geir was saying, and their situation was now very serious. They had expanded rapidly and were now many times larger than the national economy. A bailout was out of the question: “There is a real danger, good Icelanders, that the Icelandic economy would, if all took a turn for the worse, be sucked into a whirlpool along with the banks, and the result would be national bankruptcy.”

There it was. That word. But what did that mean, really? Apocalyptic images flashed through her mind: decaying buildings, people in rags, crying children, desolation, despair, hopelessness.

Now Geir seemed to be outlining some sort of plan to help save what could be saved, some sort of emergency law that would allow the government to go into the banks and take them over. And then what? What about the people, their savings, the normal functioning of society? What about the schools, the hospitals; what about imports: food, gas, medical supplies? What about people’s jobs?

Why the fuck can’t he talk about the things that matter?

The intensity of her feelings surprised her. She stared hard at the TV screen, as though she wanted to penetrate through Geir Haarde’s skull, through to his thoughts, to see if he was really telling the truth, to see what he was really thinking.

“God bless Iceland.”

The broadcast ended. Those last words hung in the air. God bless Iceland. Well, what the fuck was that supposed to mean? Angrily she flicked off the television and threw the remote control to one side. She got to her feet and walked into the next room, then back again. A film started playing in her head. She could see it now. Things would start running out in the shops. Fresh fruit and vegetables would go first. Then other food. People would start hoarding. In fact, they had probably started already. Soon the petrol would be gone, so no cars could drive. Things would start to break down, and no parts would be available to fix things. People would leave in droves. She and Damien would go back to the UK. Their money was safe – silently she thanked her stars for having transferred the proceeds from the sale of her mother’s flat out of Iceland a decade before. She had wanted to move it into that Icelandic bank they’d opened up in the UK – Icesave, they called it. It was an online venture, and despite existing only in cyberspace it had been a tremendous success. Iceland’s very own Landsbanki had stormed onto the UK market by offering the highest rates of interest at any given time. Their marketing campaign had consisted of idyllic pictures of the pure, pristine Icelandic landscapes, and regularly there had been reports in the news of all the millions of pounds that were pouring in. Frida had been filled with patriotic pride and had been this close to transferring her savings into it, but Damien had stopped her. He wasn’t buying the hype – those high interest rates came at a price, he said, and the price was higher risk. She’d been indignant; these were her countrymen, how dare he suggest that they did not abide by the highest standards. Icesave was a branch of Landsbanki, after all, and Landsbanki had been around since the 1800s. Indeed, it been Iceland’s central bank until the mid-twentieth century. A more solid banking institution was scarcely found in Europe. Damien reminded her that the bank had been privatized since then, and the owners were dubious – there was some talk about their ties to the Russian mafia, and one of them had been convicted in Iceland for fraud. “I don’t know why the Icelandic government would consent to sell to such shady characters,” Damien had remarked, at which Frida had ended the conversation, deeply offended. In the end, she had decided to do a bit more research, but other things had got in the way, and eventually she had forgotten about it.

Her cellphone rang, and she jumped. Scooping up the phone, she saw that it was Damien. Her heart started pounding. They hadn’t spoken since their last grisly encounter, and all that she now knew about him … could she keep it together enough to seem normal?

“Hello Damien.”

Yes, she could. Her voice was steady and clear. Years of rehearsal in saying the right thing had delivered results.

“Hello my dear. How are you?”

My dear. She felt sick. “I’ve been better.”

“Did you see Haarde’s address?”

She could hear people in the background. He wasn’t alone.

“Of course.”

“And what did you think?”

“I don’t really know what to think.”

“We had an interpreter here.”

There was a brief silence, in which Frida registered his reproach.

“Oh. Good that you were able to find someone,” she said, keeping her voice even. “So what did you think?”

“He skirted the real issues very nicely.”

“You think there are things that he’s not saying?”

“Oh, of course. He was being deliberately vague. Surely you noticed that.”

That old derision again.

“Of course I noticed that,” she said, annoyed by the irritability in her own voice.

“There was one thing we weren’t quite clear about, though,” he continued after a brief pause. “Did he say anything about the government stepping in to guarantee deposits?”

“He said that deposits were safe.”

“Did he mention anything about foreign accounts?”

“I don’t think so. Why?”

“It’s important for us to know.”

Ah. So he had an ulterior motive for this phone call. He wasn’t just calling to see how she was. But then again, she should have known that.

“Didn’t the interpreter say?” she asked with deliberate sweetness in her voice.

“No. She wasn’t clear. And we wanted to double check. I have to go now, my dear. I fly in on the afternoon flight tomorrow.”

Frida ended the call and tossed the phone receiver onto the sofa like it was toxic.

He was coming back tomorrow. And everything had changed. Everything.

* After he was ousted from government, Geir Haarde was indicted for his part in the meltdown. He was cleared on three of four accounts, and received no punishment for the one on which he was convicted. Recently he was appointed Ambassador to the United States, the most coveted post in the foreign service.

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Iceland, six years after the meltdown

by alda on 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. Having been abroad, I had no idea that anything was amiss [though we certainly had noticed that the Icelandic krona had been devaluing steadily while we were away]. Of course that was only the beginning of what was to come. Within days everything had spiralled out of control, the krona was in free-fall and Iceland’s other two commercial banks had also collapsed.

Suddenly the eyes of the world were on Iceland. The international media flocked here and variously reported that Iceland was a pariah state, or the canary in the coalmine of what was to come. Meanwhile, all was chaos in Icelandic society and those of us who lived here struggled to come to grips with what had happened, and what lay ahead. It was a scary, scary time.

HopelessnessSoon, though, it became apparent that the implosion that had taken place was not going to manifest instantly. Indeed, foreign reporters seemed perplexed to come here and see that life was more or less continuing as normal – there were no people throwing themselves out of windows in despair, or families in tattered clothes living in cardboard boxes on the streets. [I sometimes got the feeling that they were a little disappointed not to find more physical signs of the disaster - it didn't exactly lend itself to visual representation in the media. That changed when the demonstrations started - but that's another story.]

Those of us on the inside, meanwhile, knew that the disaster would be less a sudden implosion than a gradual, debilitating erosion that would only begin to show its true face in a few years’ time.

And that is where we are now.

This weekend I had a lengthy conversation with a friend of mine – one of several conversations I have had with people on the same topic in the past while. The stories are all more or less the same, only with a slight variation of circumstance. Her story is this: around ten years ago she bought a condominium in Reykjavík. [Most people in Iceland, incidentally, own their own flats. The rental market is both small and outrageously expensive.] She took out a mortgage from the state mortgage fund for ISK 16 million [around USD 132K]. Since then, she has been making payments religiously every month. Today, even though she has made regular payments and not remortgaged her home, she owes ISK 27 million [USD 223K].

Why? Because of the system of mortgage indexing. Here in Iceland, our mortgages are indexed to inflation, which means that when there is rampant inflation [which is the result of, say, a country's economy melting down] the principal of our mortgage increases in tandem. And of course the interest just piles up on top of that.

Since the meltdown six years ago, everyone’s mortgage has gone up. People owe a lot more than they did when they started. It’s the same for us. EPI and I were very lucky in that we bought our home in 2002, just before the mortgage bubble started and property prices rose astronomically. That means we didn’t have to take out a very high mortgage compared to those who bought a few years later, but even so, it has increased by 50 percent from what it was 12 years ago – even though we have made our payment every single month since then.

For us it is manageable because the amount is relatively low [and there are two of us]. Not so for most other people. Take my friend, for instance. She is in her early sixties and has always been a vibrant and energetic woman with no financial issues. Then she had an accident that rendered her unable to work. Today she is on a disability pension. She is divorced, and her kids have moved out [her youngest lived with her until recently and helped with the mortgage]. Her payment is now so high that she struggles to make ends meet. She has tried to sell her apartment but so far has had no luck. By the time she has paid her mortgage each month she has ISK 50K [USD 413] left over on which to live.

She has sold her car and is trying to get a little extra in by renting out the parking space in a communal garage. She has also considered renting out rooms in her flat to help offset the costs. I asked whether she could rent out to tourists, through Air B’nB or some such outfit. No – there has recently been a crackdown on people doing that [at the behest of the association of hotels and guest houses who saw that regular folks were starting to get a substantial slice of their pie] and they now require people to apply for licences if they want to rent out. I asked whether she couldn’t just do that, then. No – because as soon as you have the licences, they raise your property taxes sixfold. So that would eat up all her profits and even drive her into the red. Meanwhile, regular property taxes have gone up anyway, as has everything else – food, gas, heating costs, etc. All except disability pension.

Again, this story is not unique. It is the norm. And it is so frustrating and infuriating that I could scream. My heart bleeds for all the people, like my friend, who have tried and tried and tried to do the right thing – to make their monthly mortgage payments, even though it means cutting down somewhere else: scrimping on food, or on buying their kids new shoes, or whatever. Because that is what the vast majority has done. Tried and tried, for the sake of their own pride and dignity. Meanwhile, if they want to take some initiative to help themselves, like renting out rooms in their homes, they are shot down before they even begin. People are THIS CLOSE to giving up. And many of them already have. Many have stopped making payments and declared bankruptcy with the resulting implications, and/or buggered off to Norway. And who can blame them? I can’t. But my heart really goes out to all the people who have struggled, and are struggling, to serve a horribly corrupt and unjust system that has absolutely no regard for their welfare.

Because after a while you really do wonder: what is the point? When your government consistently lies to you, staring you in the face and promising relief while at the same time blatantly shifting money from the poor to the rich, when Iceland is losing on average 66 doctors a year [in a country with a population of 320,000], when young people are opting to join the European Union one by one by leaving a country that offers them no future and moving abroad … it really is hard not to wonder: What is the point?

EPI met a man last Friday who owns a chain of shops here in Iceland and is consequently financially stable. Even he is horribly pessimistic. He cannot see how this country will go on, and predicts another collapse in another year or so.

Yeah. So that’s where we’re at, six years on. And no solution in sight, only more of the same.

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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 don’t have access to this sort of information. Please keep in mind that this was written on September 3rd, and since then two new fissures have opened up.

Guide to Iceland pic

The translation is taken more or less verbatim from this link. Please keep in mind that I may not have all the scientific terms down pat, but I believe I’ve managed to get the meaning across:

Some 4,500 million years ago, when our solar system had just been created, the earth was a single ball of fire – a smouldering cauldron of melted rock. Gradually its surface cooled and the earth’s crust was formed. Yet deep in the centre of the earth there is still a vast amount of heat, and material is constantly seeking to find a way to the surface. As it gets near the surface it begins to melt and forms lava fountains that find their way out. This happens in two places: where the heat deep in the earth is especially great, in so-called hot spots, and where the earth’s tectonic plates either meet or pull apart. Iceland sits on top of such a division of plates, and it is also on top of a hot spot. Consequently volcanic eruptions here are more common than in most parts of the world.

The centre of [Iceland's] hot spot is beneath the area around Bárðabunga, a region that seems quite innocuous as it is covered by Vatnajökull glacier. However, if the glacier were peeled back it would reveal one of the country’s largest and most active volcanoes. There are around seven kilometres from one edge of the caldera to the other, which is approximately the distance from the old city centre of Reykajvík to the Grafarvogur suburb.

Underneath the volcano, the molten lava flows from the centre of the earth and collects in a huge chamber believed to be under the Bárðarbunga mountain.

In recent years, the pressure beneath the mountain has grown. The land has risen, but in the end, something has to give. Like water, the lava finds the easiest route along which to flow, and instead of breaking through the magma chamber it has flowed to the side, into a dyke, or tunnel. This flow of magma has now lengthened and currently extends some 40 km to the north.

The flow came to a halt beneath Holuhraun [where the current eruption is] and the magma broke its way to the surface. However, the eruption of lava out of the fissure in Holuhraun is less than what is believed to flow into the dyke, and so the current eruption is not sufficient to release the pressure.

What will happen next is uncertain. There have been many large earthquakes in Bárðabunga itself and scientists say they cannot exclude the possibility that it will erupt. If that happens, it will melt its way through a layer of ice 850 metres thick, which means that flooding and ash emissions will follow. As yet, however, there are no indications that this will happen.

Many thanks to Guide to Iceland and lurie Belegurschi photography for the above photo. 

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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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Day six: beautiful Rauðasandur and the westernmost part of Europe

June 18, 2014

It was the final day of our West Fjords adventure, and guess what happened. This: After five days of pretty exceptional weather, we woke up to rain and, most annoyingly, FOG. Over there, across the sea, you would normally see mountains. On that day, they were completely obscured. That threw a bit of a wrench in our […]

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Day five: paradise and waffles in the middle of nowhere

June 17, 2014

In which we barrel along on our road trip of the amazing West Fjords.  Having spent half of Sunday in Ísafjörður we hit the road again, this time due south. We weren’t headed far, only a couple of fjords down to Dýrafjörður – more specifically to Núpur, which for decades was a parsonage and also […]

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Day four: lovely Ísafjörður and some unexpected tangible history

June 16, 2014

We left off last post where EPI and I were driving from Djúpavík to Ísafjörður, via Hólmavík. We arrived in Ísafjörður pretty late, the drive being quite a distance – all that threading of fjords in and out, back and forth. The area we drove through is known as Djúpið – “the deep” – because […]

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