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With impunity

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.


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.


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.


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.


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.]


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.


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.


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.


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.


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.


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.



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