203 Views

An expensive lesson in globalisation

Icelanders send out a strong message to Gordon Brown - Photo: Lukka Sigurdardottir (www.indefence.is)

Icelanders send out a strong message to Gordon Brown - Photo: Lukka Sigurdardottir (www.indefence.is)

Iceland: Yes, it’s that cold place where Björk’s from – but more recently, the country has become famous for the sudden collapse of its banks and being, as our most famous export once sang, in ‘a state of emergency’.

Is there any hope left for Iceland?

The situation has got everyone scratching their heads with a look of disbelief. How, Icelanders ask, could this happen to an independent democracy? Having gone from being one of the poorest nations in Europe when they gained independence in 1944, to one of the richest, people are utterly confused by the situation.

A nation with a bigger ego than population worked their woolly socks off to prove just how much it could achieve. On the way, it became one of the richest countries in Europe. In recent years Iceland has seen more money coming in than ever before, owing to the rapidly expanding financial sector, leading to a thriving economy and inevitable consumer frenzy. Perhaps, cynics say, it’s time for a reality check.

‘Having gone from being one of the poorest nations in Europe in 1944, to being one of the richest, people are utterly confused by the situation.’

Now, everything has come to a standstill. International money transfers have been halted for weeks now and many living overseas who were paid in kronas have been left stranded. Icelandic students studying abroad cannot get their loans and some are having to pack up and go home as they can’t afford even the basics. One student living in Belfast on 60 Euros had no idea how much she’ll receive from the Government loans body, or indeed, when she’ll receive it. Iceland’s biggest export, seafood, (a third goes to the UK) cannot be paid for. In a population of 320,000, a massive 7,000 jobs are expected to go in the next weeks and months. Tens of thousands have lost their savings. Loans, linked with 15.7% inflation, are soaring. And as the bitter winter closes in on Iceland early this year, it seems like everywhere you turn, people are stranded, lost, and desperate.

Blame for the crisis has been placed on external financing, privatisation of the banking sector, wholesale funding, and a new generation of Icelandic entrepreneurs and investors who snapped up a nice proportion of the British high street. All this led to the total assets of the three main banks in Iceland reaching more than ten times the country’s GDP, leaving the Bank of Iceland no chance in defending or supporting its financial sector. How could the government and the Financial Supervisory of Iceland allow the banks to become this big within Iceland? And why weren’t the banks set up so that the responsibility for their actions would lie within the countries in which they were trading? These are the questions now burning on Icelanders’ tongues.

Other queries being raised concern the whereabouts of these Icelandic investors and entrepreneurs. Companies such as Icelandair (a commercial airline) had saved hundreds of millions of pounds to safeguard against such a financial crisis before being taken over, but they have since been caught off guard in the realisation that the money has been spent. People who thought their interests were being looked after have invested their pensions in shares of the supposedly safe banking industry, only to be left with nothing.

Photo: Lukka Sigurdardottir (www.indefence.is)

Photo: Lukka Sigurdardottir (www.indefence.is)

Many Icelanders feel as though they’ve been hoodwinked into believing that company shares, close to 100% loans and high interest rates were full-proof. The money glacier has melted and Iceland is swimming in a sea of foreign debt.

Offering higher interest rates than British counterparts, the controversial Ice Save Funds have attracted a great number of British investors – including local councils, charities and universities – all of whom have been affected and have no idea when, if at all, they will be seeing the money.

Icelandic Finance Minister, Árni Mathiesen, apparently stated that the Icelandic government would “not stand by their commitments,” and in response, Alistair Darling controversially attempted to stop UK savers from losing their money: UK assets were seized and Icelandic bank Landsbanki found itself on the UK terrorist list – a list that includes Al-Qaeda.

In fact, Mathiesen did not make any such statement, as he apparently insisted that Iceland would indeed be standing by their commitments. This has since put Darling in a tight spot as many have raised concerns about British anti-terrorist laws being banded-about so freely. It has even been claimed that had the British government kept its nose out of the crisis, the banks (or at least the largest – Kaupthing) would not have collapsed at all.

Were Gordon Brown and Alistair Darling simply trying to do the right thing, or were they playing a much bigger political game? Some reports have suggested that other foreign banks might cause a much bigger problem and that is why they’ve taken such a tough stand and made an example of Iceland.

The British government now plans on suing the Icelandic nation, and many Icelanders are angry at being labeled as terrorists and are calling for their government to sue Britain back. In their bid for popularity, Brown and Darling may have made a big mistake. If the Cod Wars were anything to go by, bullying a small nation simply doesn’t work out in the long run.

Many may expect the terrorist-tag issue to just blow over – Darling has kept quiet about what was really said by Mathieson, and the British Government has placed Landsbanki into a special, new non-terrorist category. Icelanders, however, are profoundly aggrieved. A new campaign – www.indefence.is – has been set up, where hundreds have signed a petition and sent in pictures with statements like, ‘I know I’m beautiful, but that doesn’t make me a terrorist’. Britons have even got in on the act, with ‘British and ashamed of Gordon Brown’. It certainly feels personal.

The first step to recovering the economy has been taken, with Iceland asking the International Monetary Fund (IMF) for help. It is unclear whether the demands from the British government will be part of the negotiations, but the IMF has agreed to lend Iceland a third of what is needed to get their economy and international trade going again. For the other two-thirds, the Icelandic government is appealing to fellow Nordic nations and is in talks with Russia. For now, it’s a waiting game.

At best, the world may be learning a lesson; at worst it will follow the same pattern as before. For now, all Icelanders can do is to hope they’ll survive this awful, cold winter. A state of emergency is certainly not a position any of us want to be in. There are long dark days ahead.

Get the best viral stories straight into your inbox!

Don't worry, we don't spam

Leave a Reply

Join the Badger Team

Apply today!

Latest Posts

Union obliterates the debate – unwritten requirement used to shut down free speech debate
Campus News
915 views1
Campus News
915 views1

Union obliterates the debate – unwritten requirement used to shut down free speech debate

Jordan Wright - April 27, 2018

Student society Liberate the Debate’s most recent event was cancelled over a lack of compliance with the Students' Union's (USSU) requirement for a neutral chair - a…

Verve Couture – Musicality, kitsch & ignition: the beginning of a series
Arts
248 views
Arts
248 views

Verve Couture – Musicality, kitsch & ignition: the beginning of a series

Ricardo Reverón Blanco - June 17, 2018

Pictured: Zac Black At Proud Cabaret audiences were spellbound as if at night at the circus, yet this was not like Angela Carter’s magical realist novel; Verve…

Fleabag on stage at The Old Market – review
Arts
264 views
Arts
264 views

Fleabag on stage at The Old Market – review

Florence Dutton - June 11, 2018

[caption id="attachment_35513" align="alignnone" width="2400"] Fleabag at Soho Theatre[/caption] Last Monday at 8pm at Brighton’s The Old Market, I sat myself down in my theatre seat eagerly awaiting…

Fleabag preview
Arts
246 views
Arts
246 views

Fleabag preview

Florence Dutton - June 2, 2018

[caption id="attachment_35513" align="alignnone" width="2400"] Fleabag at Soho Theatre[/caption] Following the mass success of the Bafta award-winning BBC Series, DryWrite and Soho Theatre are about to hit the…

Brighton Festival: Ezra Furman at the Dome
Arts
305 views
Arts
305 views

Brighton Festival: Ezra Furman at the Dome

Georgia Grace - June 1, 2018

Having completed my final semester of university with modules on punk history and queer arts, it was fitting that I rounded off my end-of-assessment celebrations by attending…

Arts
311 views

The Tempest review

Georgia Grace - May 30, 2018

As the sun begins to set over Hove Green, tinnies of Red Stripe are cracked open, tartan blankets are strewn, and families tuck into their picnic hampers.…

A Glass Half Empty review
Arts
282 views
Arts
282 views

A Glass Half Empty review

Georgia Grace - May 27, 2018

For those of us coming to the end of another year of university study, the prospect of careers, marriages and babies may seem a long way off.…

DollyWould at The Old Market review
Arts
266 views
Arts
266 views

DollyWould at The Old Market review

Alex Hutson - May 27, 2018

Sh!t Theatre’s DollyWould is a hilarious, thoughtful and experimental performance piece. The award winning show has the Sh!t Theatre duo integrating comedy, storytelling, personal experience and music.…

UCU Launch Petition to End the ‘Hostile Environment’ at Sussex
Campus News
406 views
Campus News
406 views

UCU Launch Petition to End the ‘Hostile Environment’ at Sussex

Billie-Jean Johnson - May 26, 2018

The Sussex branch of the University and College Union (UCU) has launched a petition calling for Vice-Chancellor Adam Tickell to end the 'hostile environment' at Sussex. The…

Arts
213 views

Shakespeare in the sun – The Tempest preview

Georgia Grace - May 24, 2018

In a world of dystopian King Lears and female Hamlets, Shakespeare’s classics are constantly being reimagined for the modern day. There’s something oddly refreshing then about the…

Review: Nick Cave Double Bill at The Old Market (TOM’s Film Club)
Arts
675 views
Arts
675 views

Review: Nick Cave Double Bill at The Old Market (TOM’s Film Club)

Sophie Coppenhall - May 23, 2018

What a phenomenal contrast these two films present when watched side-by-side. In essence, together they are capable of tracing inner and outer metamorphoses of their subjects. The…

Dollywould at The Old Market preview
Arts
277 views
Arts
277 views

Dollywould at The Old Market preview

Alex Hutson - May 22, 2018

From the 22nd May - 25th May 2018 DollyWould will be showing at The Old Market. An exciting new show, presented by Sh!t Theatre, who won the…

Exhibition: Io-sono Fedilouu
Artist Focus
366 views
Artist Focus
366 views

Exhibition: Io-sono Fedilouu

Ricardo Reverón Blanco - May 16, 2018

Last week artist Fedilou made her debut exhibition in the downstairs space of Morelli Zorelli, a quaint vegan Italian restaurant in Hove, featuring a collection of intimate…

Interview with Philosophy faculty and COGS director Ron Chrisley
Interview
279 views
Interview
279 views

Interview with Philosophy faculty and COGS director Ron Chrisley

Nikolaos Manesis - May 15, 2018

Ron Chrisley is a Reader in Philosophy, on the faculty of the Sackler Centre for Consciousness Science, and is the director of COGS (Centre for Cognitive Science).…

Adam review
Arts
347 views
Arts
347 views

Adam review

Ketan Jha - May 13, 2018

If you have been a stranger to the stage this spring and decide to see one contemporary show, let it be Adam. This reviewer went in entirely…

Brighton Fringe Preview: Nick Cave Double Bill at The Old Market (TOM’s Film Club)
Arts
398 views
Arts
398 views

Brighton Fringe Preview: Nick Cave Double Bill at The Old Market (TOM’s Film Club)

Sophie Coppenhall - May 13, 2018

In celebration of iconic Brighton local, legendary alt-rock musician (and episodic actor) Nick Cave, TOM’s Film Club are hosting a double-bill screening of his films at The…

Whimsical fairy-tale meets class war – Standard: Elite review
Arts
421 views
Arts
421 views

Whimsical fairy-tale meets class war – Standard: Elite review

Georgia Grace - May 11, 2018

Meta-theatricality and interactivity are becoming all the more vogue in contemporary theatre, and in a world where the arts are becoming increasingly open and democratised, I find…

A Year of Art Society: The Best Picks
Artist Focus
328 views
Artist Focus
328 views

A Year of Art Society: The Best Picks

Alex Leissle - May 9, 2018

  [gallery type="slideshow" ids="35385,35386,35387,35388,35389,35390,35391,35392,35393,35394,35395,35396,35397,35398,35399,35400,35401,35402,35403,35404,35405,35406,35407,35408,35409,35410,35411"]

More Brit(ish) than ever: A review of Afua Hirsch at Brighton Festival
Books
360 views
Books
360 views

More Brit(ish) than ever: A review of Afua Hirsch at Brighton Festival

William Singh - May 9, 2018

Afua Hirsch’s 2018 book - part memoir, part polemic - provokes mixed feelings. So too did her discussion of the topic at this year’s Brighton Festival. Don’t…

Ethnic-bioweapons: between conspiracy and reality
Science
458 views
Science
458 views

Ethnic-bioweapons: between conspiracy and reality

Luke Richards - May 8, 2018

Bioweapons exist, while ethnic-bioweapons are whispered conspiracies. Pandemics can fairly hazardous to human life, the 1918 Flu Pandemic killed 20-50 million people. A man made pandemic could…

Breaking: Spring referenda results announced
News
388 views
News
388 views

Breaking: Spring referenda results announced

Jessica Hubbard - May 4, 2018

Students have voted to support the BDS (Boycott, Divestment and Sanctions) movement, reject Prevent and adopt new Gender Equality policies. Results for the Students' Union referenda were…