A VIEW FROM THE HIGH NORTH. An interview with Mr. Jón Baldvin Hannibalsson, former minister for foreign affairs of Iceland by Kourosh Ziabari
1. Baltic liberation and the dissolution of the Soviet Union.Why did I take it upon myself to promote the cause of the Baltic nations´ restored independence in the early nineties? Because the leaders of the West at the time were not, de facto, following up on their rethoric on democracy and national self-determination. Why not? Because they had, unwisely, placed all their bets for ending the Cold War on the political fate of president Gorbachev. Nothing should be said or done which undermined his position. If he were to be deposed, the hardliners would come back. And there was a lot at stake. We might return to the Cold War. That would mean the end of the peace process. Negotiations on both conventional and nuclear disarmament would be off the agenda. The peaceful reunification of Germany would no longer be possible. And the liberation of Central and Eastern Europe might be put down by force.
All of this, they said, was dependent upon Mr. Gorbachev remaining in power. When Mr. Gorbachev´s proposed domestic reforms turned out to be a failure, his only remaining mission was to keep the Soviet Union together under a new constitution – at all cost. So, the leaders of the West ended up supporting Gorbachev´s policy of keeping the Soviet Union together ( and the Yugoslav Federation as well) – in the name of stability. That´s why president Bush made his notorious „chicken speech“ in Kiev in February 1990, appealing to the Ukrainians „not to succumb to extreme nationalism“, but to remain loyal to the Soviet Union in the name of peace and stability. This speech by an American president would be music to the ears of Mr. Putin, who has long mourned the demise of the Soviet Union as „the greatest geo-strategic disaster of the 20ieth century“.
This was why Chancellor Kohl and president Mitterand jointly wrote a letter to president Landsbergis, appealing to him to postpone the implementation of Lithuania´s declaration of independence and instead negotiate with the Soviets without preconditions. This is why US high officials gave the same message to the Baltic freedom fighters in Vilnius, Riga and Tallinn. And this is why, since the voices of the leaders of the Baltic independence movements were not listened to, that I tried to lend my voice to theirs in Western councils – especially NATO. This is why I responded, alone among NATO foreign ministers, to Baltic leaders´appeal to come and stay with them in January 1991, when the Soviets had decided to use force to crack down on their indendence movements and to bring about regime change.
This is why, when the hardliners´ attempted coup d´etat in Moscow August 1991 had failed, that I decided to use that window of opportunity – the power vacuum and confusion in Moscow at that time – to invite the foreign ministers of all three Baltic states to Reykjavík to formalize the recognition of their restored independence. By doing so, I hoped to start a process that would become irreversible. That turned out to be right. To my mind, this is an example of „the solidarity of small nations“ which, under the correct circumstances, can succeed, when the leaders of major powers fail.
You ask about the future of democracy in those countries, which have become an „inseparable and integral part of the European Union“ – and, you might have added, NATO. Well, compare their position with that of Ukraine´s. The Lithuanians, Latvians and Estonians have used the time since independence to consolidate their democratic institutions and to secure their independence in multinational organisations, such as the EU and NATO. The Ukrainian political elite failed utterly to do anything of the sort. Despite high expectations of the „Orange Revolution“ the leaders of Ukraine failed miserably in implementing any meaningful political and economic reform. Their society – including the defense establishment – is wormeaten to the core by uncontrollable corruption. That’s why the Ukrainian leadership is now at the mercy of the Kremlin.
2. The EU and the Balkan tragedy.You quote Slovenian sources who maintain „that the superpowers, including the EU member-states at the time, had not supported their cause...“. That was indeed the case. When the Yugoslav federation was in the process of dissolution, the EU leadership adopted a policy of „wait and see“. The long serving German foreign minister at the time, Herr Genscher, had a different take on the situation, but couldn´t get his colleagues in the EU to take action. Just as in the case of the dissolution of the Soviet Union, I was firmly convinced that the break-up of the Yugoslavian federation was inevitable. It could only be held together by force, which indeed was what the Serbs used their army for. If we wanted to prevent civil war with all the inherent atrocities, the international community had to intervene in time to negotiate a peaceful and orderly emergence of the constituent parts of former Yugoslavia as independent states. The sooner this could be done, the better. To „wait and see“ was to invite disaster.
Since Iceland was a member-state of EFTA I had close contacts with the Austrian authorities who, for historical reasons, were well informed about the situation on the ground in the region of the former Habsburgh empire. The Austrians knew about my Baltic initiatives. They informed me about Genscher´s position. I received the message that if I could take the initiative outside the EU, it would help Genscher turn around the big ship of the EU. This explains why Iceland became the first country to recognize the de facto independence of Slovenia.
In the case of Croatia, the situation was a bit more complicated. Iceland, after all, has its own national interests to take care of. Within NATO, at the time, there were ongoing major negotiations with the Soviet Union on disarmament in both conventional and nuclear weapons. We were worried that the Soviets would be tempted to depose of their nuclear waste, especially from their submarines, into the high seas. Such action on their behalf could easily have destroyed our economy which was based on the utilization of marine resources. At a NATO ministerial meating in London in the fall of 1990, I held up any agreement on the final text (which also involved German reunification) until I had, behind the scenes, secured German support for our precautionary clauses on naval disarmament. In addition I agreed that Iceland would take the initiative in recognizing the independence of Croatia, thus helping Germany to put pressure on their EU colleagues to give up the impotent „wait and see“ position, while the civil war in former Yugoslavia was gaining momentum.
By hindsight few would deny now that the EU „wait and see“ - policy was an invitation for disaster. Had they acted earlier and with greater resolution, many tragedies of the Balkan Civil War could have been averted. The record of Slovenia since independence more that 23 years ago has proven our case.
3. Iceland and the EU.Do I believe that the next enlargement plan will include Iceland´s accession to the 28-member block? No, I don´t. Does the government have any strategy for joining the EU? No, it hasn´t. Does Iceland meet the criteria necessary to be qualified for EU membership? No, it does not.
In Iceland, contrary to what is the case in most countries, it is not only the extreme left, but also the right and the right of center, who are against EU-membership. Why? The two major right of center parties (the „Independence Party“ and the „Progressive Party“) are traditionally beholden to the most powerful special interest groups in the country: The ship owners´ lobby and the farmers´association. The ship owners have been given monopoly rights to utilize the fish stocks within the Icelandic exclusive economic zone. Those monopoly rights have been handed out for free, despite the law declaring the fish stocks to be the common property of the nation.
The shipowners´ lobby fights tooth and nail against the proposal, that the fishing rights be auctioned to the highest bidder. They regularily put a lot of money into scare campaigns maintaining that, if inside the EU, foreign capital would buy up all the fishing rights. This sort of propaganda is effective in the fishing villages along the coast. Icelandic farmers, along with their Japanese and Norwegian colleagues, are heavily subsidized. Most of their income comes from the tax-payers through the state budget. Nonetheless, food prices in Iceland are much higher than in most other European countries. The farming lobby is entrenched in both right of center parties, which gained an outright parliamentary majority in the last election (2013).
Those were the parties that ruled the country from 1995 to 2008 and bore the major responsibility for its financial ruin. After heroic efforts to clean up the mess the left wing government, which came to power after the socalled „Pots – and pans – revolution“ in 2009 had become thoroughly discredited and unpopular. As a matter of fact the only consistently pro-European party in Iceland is the Social-democrats. They negotiated Iceland´s membership in the EEA-agreement (1989-94), while all other parties were at one time or another against.
In the political trauma in the wake of the Crash, the Social-democrats mustered a parliamentary majority for accepting an application for EU membership. Their Left-Green partners, who are against EU-memberhip, opted for not opposing negotiations, but maintained their right to turn against the agreement in the end.
What is the current situation then on Iceland´s membership application? The government parties, with their strong parliamentary majority, are against membership. They have not formally withdrawn the application, but put it on hold and dissolved the negotiations team. This is incomprehensible in light of the fact that both parties made it their election pledge, to hold a referendum on the negotiated outcome. A clearcut majority, according to the polls, wants to be allowed to vote on the outcome in such a referendum, even if a majority is still against membership.What does this mean? It means that Iceland will remain outside the European Union, for as long as we can see. The only thing that can change this is a new economic shock, drastic enough to force the people to reconsider.
4. In a debtors´ prison.Despite enduring myths, propagated by international media with the diligent help of the president of Iceland, maintaining that Icelanders simply refused in a referendum to pay „other people´s debt“ – the simple truth is that Iceland is heavily burdened by debt. This applies to the state, the municipalities, many companies and households. And far from having reovered from the crisis, Iceland is still covered by financial landmines left over from the Crash. How come? Before the Crash a lot of speculative capital, seeking short term profit from Iceland´s „strong“ currency and exorbitant interest rates, became locked in the country due to IMF-imposed capital controls. And although foreign banks (mainly German), being the main creditors of the fallen Icelandic banks, have written off their loans, they have sold their claims on the bankrupted banks in the aftermarket at fire-sale prices.
The current owners of those claims are mainly American hedge-funds. The IMF imposed capital controls, which were meant to be short-term, have now lasted for more than six years. Although everybody agrees that they are hindering foreign direct investment and long term economic growth, neither the government nor the Central Bank has come up with a solution. If those capital controls were to be lifted on short notice, it would mean a new major collapse of the national currency. A potential disaster is hiding around the corner. In this sense the 2008 financial crisis is still ongoing, as far as we are concerned.
Some commentators (and certainly the shipowners´lobby) maintain, that being outside the euro zone at the time, gave Iceland enough flexibility to correct a hugely imbalanced economy by devaluating the currency. It would be nearer to the truth to speak about the collapse of the currency (50-70%). A devaluation on this scale has drastic economic and social consequences. Yes, it´s good for exports (shipowners, foreign aluminium companies and tourism). But it is extremely bad for almost everybody else. It is specially bad for those who were indebted in foreign currency including most companies and one third of households. For those parties the capital stock of debt doubled and inflation in the wake of devaluation meant exorbitant interest rates.
Those indebted in domestic currency were not much better off. The reason why is that in Iceland debt service is automatically linked to the consumer price index (CPE). This applies to mortgages and long term loans. Automatic indexing of debt was meant to be a short term fix against inflationary pressures. In the long term it has had the unforeseen consequences of relieving banks and other creditors of all risks and placing the consequences of economic mismanagement and fluctuations squaerly on the shoulders of the debtors. Icelanders are now in a debtors´ prison.
Would we have been better or worse off within the eurozone? If we would have been forced by the commission and the ECB to pay every penny of the foreign denominated debt by our fallen banks (ten times our national GDP), the whole of eternity would not have been long enough to pay up. Remember, it was the hapless Irish government at the time (September 2008) which imposed upon Irish taxpayers to pay their banksters´debts. The way the EU (read: Germany) treated Greece and Cypress is of course calamitous. Can you imagine the US Federal Government and the Federal Reserve treating the black hole of Californian state finances in the same way?
But look at the case of Estonia? Their contraction of GDP was greater than ours. Luckily they didn´t own the banks. They were all foreign owned. But households and companies were heavily indebted. Estonians decided to tie themselves to the mast and ride out the storm. They accepted considerable reduction in wages and salaries without murmur. That is called internal devaluation. But they did not devalue their currency and stuck to their declared aim of adopting the euro. The capital stock of debt did not double and interest rates remained low (whereas in Iceland they went beyond 30%). The question remains: Which is better in the short term: devaluation or a stable currency? In the long run devaluation is an addictive disease which ultimately destroys a healthy economy. Look at Argentina. Any further questions?
5. Solidarity with the plight of the Palestinian people.Were we under pressure not to vote for Palestine´s UN observer status and not to grant recognition of Palestinian statehood? You bet we were. George Mitchell, the White House special envoy in the Middle East, Nicolas Burns, the deputy secretary of state and ultimately Madame Hillary Clinton herself tried to dissuade our foreign minister, my successor and friend, Össur Skarphéðinsson, from doing the right thing. He listened politely to their arguments, but found them deficient. We have to face the facts: The US has, beyond any reasonable doubt, failed in its self-imposed role as an honest broker between Israel and Palestine. Israel is not respecting any obligations imposed upon it by international agreements and international legal norms. Their treatment of the Palestinian people is reprehensible beyond words. It is also shameful that the international community has done so little to relieve the torture of the Palestinian people by the Israeli prison wardens in the biggest prison on earth: Gaza. Did anyone mention the Warshaw ghetto?
After the Nazi holocaust we, Nordic social-democrats, have been raised as ardent supporters of the rights of the Jewish people to settle in their ancient homeland. It was the Icelandic UN ambassador, by the way, who presented the proposal before the General Assembly on the partition of Palestine and the establishment of the Israeli State in 1948. The viability of that state is, of course, dependent on that state being able to co-exist in peaceful relations with its neigbours. The present extremist leadership of the State of Israel seems to be hell-bent on its own self-destruction. The repeated massacres of defenseless civilians, women and children, in their onslaught on the imprisoned population of Gaza, are nothing short of war-crimes. Through their continuous economic and military support of Israel the United States government must accept sharing the guilt of those crimes. The US government has therefore fortfeited all trust to act as an honest broker in this tragic conflict. It is up to the international community to seek other means. The UN bears a heavy responsibility for securing the life and liberty of the Palestinian people and their right to their own state in their part of Palestine. Palestinian statehood and full membership of the UN is a sine qua non of a solution to this conflict.
6. On immigration and integration.Can we detect some anti-immigrant or Islamophobic attutides among the people and politicians in Iceland? Sure, like everywhere else. Especially when political charlatans whip up anti-immigrant feelings in order to gain votes, as was the case in the local elections in Reykjavík. The so-called Progressive Party (agrarians) was on the verge of being wiped out from city hall until they started scare mongering on the mosque issue. Immigration, in any significant numbers, is a fairly recent phenomenon in the country. During the boom years, before the Crash of 2008, there was an acute labour shortage. After the Crash unemployment reached proportions, previously unheard of in Iceland, although the situation in the labour market has eased considerably since then. Many of the immigrants have decided to stay on after the Crash despite much lower purchasing power. These are generally speaking hard working people. So far integration into Icelandic society has been relatively unproblematic, although the government has yet to spell out their integration policy in any principled way.
7. The Middle Kingdon and the High North.Some two years ago Icelanders were taken by surprise when a Chinese entrepreneur, with close ties to the Communist Party, propsed to buy vast tracts of land (ca. 3% of Iceland) in the interior. In this barren and inhospitable region, the Chinese businessman proposed to build golf courses and luxury hotels, Las Vegas style. The government was caught utterly unprepaired. As a partner in the EU-internal market through the EEA, Icelanders enjoy the four freedoms (including the rights of establishment and employment) in EU countries. The same applies to EU-citizens in Iceland. Apart from those rules, which do not apply to citizens of other countries, the authorities have dealt with this issue on a case by case basis.
But 3% of the country was too much. Was this the beginning of a Chinese buying spree in Iceland? After some delay and a lot of confusion, the Chinese investor received an offer to rent a much smaller tract of land, which he has refused. Apart from this incident, Icelandic-Chinese relations have been excellent. As a matter of fact Iceland has already concluded a free trade agreement with China, ahead of the EU. Some commentators consider this to be a part of a long term strategy for dealing with the future consequences of climate change in the Arctic region of the High North, including our huge neighbouring country, Greenland. The icecap in this region is rapidly receeding, giving access to a wide range of plentyful resources (including oil and gas) and opening up new shipping lanes and trade routes between Asia and Europe and North-America. The Chinese presence is already felt in Greenland. Chinese scientists are highly active in the region.
With the new trading routes opening up there will be a need for major trading hubs in icefree harbours. Both Iceland and Norway can offer such facilities, but Iceland has the edge of being closer to Greenland. If those ideas are to be realized, it will call for major investments. If and when capital controls will be lifted, two of the restored commercial banks in Iceland are up for sale. There are rumours that the Chinese State Bank has already expressed interest.
High officials from China are frequent visitors in Iceland. At the same time the US has withdrawn from the region, closing down their naval base in Iceland in 2006 after a continuous presence since World War II. The Arctic Council with HQs in Tromsö, Norway, is the regional body for consultations between the eight member states: Russia, Finland, Sweden, Norway, Denmark (on behalf of Greenland), Iceland, Canada and the US. The EU has, so far unsuccessfully, sought to gain an observer status. The big question in the High North in the near future is this: Will the Arctic Council states be able to settle their differences and solve inevitable conflicts of interest peacefully, or will there be a 19th-century style grab for resources?
To deal with those issues, the Center for Arctic Policy Studies (CAPS) of the University of Iceland is convening a conference in Reykjavík on October 28th and 29th. The subject is: The Trans-Arctic Agenda: Challenges of Sustainability, Cooperation and Governance. For fuller information see: www.caps.hi.is.
8. Whale hunting or whale watching.If there were scientific evidence presented that any of the whale species that Iceland is utilizing were to be categorized as endangered species, I would recommend an immediate halt to whaling. But there is no such scientific evidence. The smaller types (e.g. the minke whales) to be found within Iceland´s exclusive economic zone are actually growing in numbers. Hunting for our home market involves such insignificant numbers that they do not matter. If international markets for whale meat get closed, whale hunting will cease automatically. So, de facto, this is not much af a problem. It is on the other hand an excellent example of political double speak and hypocracy that sometimes becomes fashionabe in international circles. Through it, some governments with a dubious environmental record (such as the US), are trying to gain green credentials by being against whaling, even if they have never seen a whale in real life. They are welcome to Iceland where whale watching is a thriving business.
9. The secular state versus religious fanaticism.Yes, I do think that ISIS is some kind of a deformity of religious fanaticism. Religious fanaticism in whatever disguise it is hiding, is among the worst plagues persuing humanity. Kidnapping innocent persons and beheading them in front of TV cameras is barbarism that is inexcusable, and even more so if the criminals try to do it in the name of religion. If moderate Muslims complain of growing islamophobia in the outside world, the best way to stop it is to clean up those dens of fanaticism which are brainwashing young people to join their evil cause in the name of religion.
Separation of church and state is the best example that Western civilization has to offer to the rest of the world. By being excluded from the corridors of power the church lost its monopoly on thought control. That meant the beginning of freedom of thought. Freedom for scientific inquiery. Without this the scientific and technological revolution – which has transformed human society and kept alive the hope of eradicating poverty, ignorance and superstition – would be impossible. This way religion was relegated to the private sphere. You can believe in whatever you want to, but please don´t bother me with it.
I am all for keeping open escape routes for poor people, fleeing tyranny or seeking to improve their lot. But the basic rule for successful integration is, that immigrants should abide by the laws and regulations of their host country. If part of their heritage, be it sanctioned by religion or law in the home country, is incompatible with the law of the host country, the law of the host country should prevail. I am talking about practices such as sexual mutilation of girls, child marriages, honour killings, etc. There is an old Icelandic saying: „Með lögum skal land byggja – en ólögum eyða“ – under the law we build our land, but without it we destroy it.
10. Mad – Mutually Assured Destruction.The destructive power of the nuclear bomb is such, that mankind can not feel safe with nuclear bombs in the hands of the power elites of this world. The biggest mistake ever made by the Western powers (the US and France) was secretely to assist and abet Israel in acquiring nuclear bombs (reportedly 100 by now). With the threat of this destructive power behind them the religious fanatics now in control in Israel have ceased abiding by any laws or norms of international behaviour and are a lethal threat to all their neighbors.
Nuclear power spreads under the law of deterrence. The US was the first to build and use nuclear bombs to massacre innocent civilians in Nagasaki and Hiroshima. In the Cold War this meant that the Soviet Union had to build their own nuclear arsenal. The balance of power during the Cold War was based on this madness (mutually assured distruction) – MAD. When Mao´s China fell out with the Soviet Union, China had to develop their nuclear deterrent. So they have. That meant that India felt unsafe unless they had their own deterrent. This meant that Pakistan had to get nuclear bombs of their own. So they have. Under this logic, those who live in the shadow of Israel´s nuclear deterrent desperately feel the need to get their hands on the bomb. So this inherent logic of nuclear deterrence will continue ad infinitum (including nuclear bombs in the hands of the lunatics in North Korea).
How are we going to stop this madness from spreading around the globe, ensuring the ultimate annihilation of humanity and life on this planet? By getting rid of nuclear bombs. A good beginning would be to start by obliterating Israel´s arsenal. Then Iran would not feel any need for a bomb. Then start talking like civilized persons to one another. That is why we should all welcome president Rouhani´s opening.