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Reykjavík burning

Last night around midnight there was a highly discernible smell of burning in our apartment, coming through the open windows. And if we listened very closely, we could hear the banging of a drum and the sounds of shouting in the distance.

It was a protest outside the Central Bank, about 3 km away. A group of people had lit a fire and, with a rhythm that has become the heartbeat of the nation, were demanding the resignation of the governors and board of the Bank.

Recent events – the calling of spring elections, the resignation of the minister of commerce and dismissal of the board of the FSA – has been like fuel on the fire of the protests. In a good way. A very good way. The people feel that they are being listened to at last and are demanding not just cosmetic change but REAL change, radical change, a complete restructuring of this society and the systems that have prevailed.

Meanwhile, we are all waiting with bated breath to see what this day will deliver. At this very moment the two coalition parties are holding meetings – separately – and speculation is rife. Some say the plug has already been pulled on the coalition, that the Social Democrats will take over leadership in the government, that cleansing in the Central Bank is already a done deal, and on and on … but nothing has been confirmed. However, both the PM and the leader of the coalition have said that the big announcement concerning the future of the Icelandic government will be made today.

Stay tuned.

THE WIND HAS PICKED UP
And it feels cold. Bare and spindly trees are swaying with the winds [of change]. Temps are reasonable, 3°C [37F]. The sun came up at 10:25, will set at 4:56.

[Incidentally, I discovered through coincidence this morning that the P.O. box provided in the ‘contact’ section of this website has been defunct ever since the day I rented it, back in November. The Icelandic postal service failed to notify the mail sorting department of the change, so evidently all mail I’ve had sent to that address has been returned to sender. Through a great stroke of fortune, one of the senders called me this morning to notify me of the return. – So did the Icelandic postal service – Íslandspóstur – offer to do something for me by way of compensation? Of course not! The woman on the phone was stunned that I should broach the idea of them refunding me the money I have been paying thus far for a the P.O. box that, as far as they were concerned, was not even assigned to me. Her remark? “It’s only ‘x amount’ that you’ve been paying since November.” !!!! argh !!!!

Bottom line: if you have attempted to send me anything [Christmas presents? cheques? hate mail? doggie-doo?] and it’s been returned with the message ‘unknown’, you’ll know why. For choosing such a completely inept service provider, my sincere apologies. Just don’t expect me to resign.]

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  • sigga January 26, 2009, 1:20 pm

    Its all over now baby blue…..

    How Geir can think that the other parties will be interested in a þjóðstjórn with them still at the helm is beyond me..

  • Elín January 26, 2009, 1:25 pm

    Beyond exciting and I will stay tuned – til hamingju Ísland!

  • alda January 26, 2009, 1:39 pm

    Yep, it’s all over! More soon …

  • Annie January 26, 2009, 1:41 pm

    Update, update!

    I voted for you by the way. Now update please.

  • alda January 26, 2009, 1:52 pm

    Gah! I’m hammering out a piece for the Guardian as we speak – update as soon as I’m done ….

  • Mondrian January 26, 2009, 1:53 pm

    Good luck with the article…

  • James January 26, 2009, 1:56 pm

    I guess today will be a day of political horse-trading as the leaders vie for positions (for themselves and their allies) in a temporary national government?…

  • Elín January 26, 2009, 2:03 pm

    BBC reporting resignation of entire cabinet!!! DONE!!!!!http://news.bbc.co.uk/2/hi/europe/7851415.stm

  • Jeffrey January 26, 2009, 2:10 pm

    There was a thoughtful piece on Bloomberg (a financial channel) in the States this morning talking about the uproar and dismissal of the FSA. The economist offered the following opinion: it all boils down to the fact that the Central Bank did not maintain enough foreign reserves to cover transnational deposits, and so when the markets crashed, there was no reliable lender of last resort. Old news, but his insight (missed his name) as to why this occurred struck me: many sectors of Icelandic society coordinated to keep the krona artificially high (imports cheaper, exports dearer, standard of living propped up artificially). He posited that the solution (collapse of the krona) has already largely occurred and that to prevent future turmoil, Icelandic society has to give in to the fact that it is a small economy, comparatively speaking, and either make societal choices that promote a larger GDP (i.e., quit opposing aluminum plants, exploit the natural resources, allow greater foreign investments) or value the krona realistically and thereby have adequate foreign reserves. Small, insulated economies are more vulnerable to shocks.

    I think his point was that there is ample blame to go around, since a propped up krona was a tool to keep the standard of living high while pacifying the “economic autonomy” and “anti-development” factions.

  • pinkpackrat January 26, 2009, 2:19 pm

    Hooray for Iceland–you guys are amazing. The people have spoken loud and clear and their voice has been heard.

    Thanks for the post, Alda, it is so hard to keep up with the minute to minute of what’s going on in Iceland and your posts are really wonderfully helpful. I’m sending a link to all my Icelandophile friends. We are watching in admiration and holding our collective breath.

  • Ljósmynd DE January 26, 2009, 2:28 pm

    And now only the Central Bank stronghold remains to be stormed. Are the white flags already flying?

  • Daniel January 26, 2009, 2:28 pm

    Hooray for Iceland!!

    I was very privledged to have been in Iceland for the past 10 days and to see all this first hand, but now that I’m back in the states, you’re once again my primary and probably sole source of news from Iceland. Thank you so much for this blog.

  • James January 26, 2009, 2:32 pm

    An interesting comment from Danske Bank’s Emerging Research Department on today’s coalition collapse: “This is not unexpected and at least it is the end of the pain politically. I would view it as good news because it should give us more clarity rather than less. Obviously, the left wing is likely to get a very good showing in the election. The likely verdict of the Icelandic people is that they will want the current government well out of the way. I would hope that any new government would stick with the current IMF deal because otherwise the future for Iceland is even bleaker economically. There is also a strong political risk that you will see much more intervention and control in the economy and that people will draw the wrong conclusions from the crisis. You could see the sort of intervention and control you saw during the 1970s and ’80s when Iceland was doing very badly in terms of unemployment and inflation.”

  • Dorothy Gale January 26, 2009, 3:07 pm

    The moral of the story is that you should not have a PM whose name does not end in -son or -dottir.

  • Chris January 26, 2009, 3:14 pm

    It’s over. Lets wait and see what the future will bring.