ICELAND AND THE CURRENT ECONOMIC CRISIS. POLITICAL COMPLICATIONS AND THE WAY FORWARD

A speech made at the Kalevi Sorsa Institude in Helsinki on the 7th of November, 2009

1. CAUSES AND CONSEQUENCES:

Since the fall, Icelanders are still debating whether they were the innocent victims of outside events or if they are themselves to blame for their misfortune. Although the international crisis (the fall of Lehman brothers) was the spark that ignited the fire, there is ample evidence to show that Iceland was headed for a fall. It was only a matter of time.

In April 2008, half a year before the crash, Willem Buiter and Anne Sibert, well-known experts in international finance, delivered a report on the health of the Icelandic banking system. Their conclusion was, that the collapse of the banking system was the predictable end of a “non-viable business model”. It was a house of cards. It was not a question of IF – but only WHEN it would collapse.

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ICELAND AND THE CURRENT ECONOMIC CRISIS – POLITICAL IMPLICATIONS AND THE WAY FORWARD

The Foundation for European Progressive Studies with the support of the Kalevi Sorsa foundation.

4th Kalevi Sorsa Research and Policy Days
Helsinki Congress Paasitorni

1. CAUSES AND CONSEQUENCES:

Since the fall, Icelanders are still debating whether they were the innocent victims of outside events or if they are themselves to blame for their misfortune. Although the international crisis (the fall of Lehman brothers) was the spark that ignited the fire, there is ample evidence to show that Iceland was headed for a fall. It was only a matter of time.

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ICELAND AND THE EUROPEAN UNION

In her article: “Iceland – What can be Learnt from the Crash” – published in Le Monde, the Daily Telegraph and Aftenposten in Norway, August 1st, Madame Eva Joly, member of the European Parliament, pleads the case of the Icelandic people, based on the premise that they were innocent victims of events, beyond their control.

True enough, as far as it goes. The Icelandic people are now presented with a huge bill left behind by financial scoundrels, who have ruined the Icelandic economy and left the nation´s reputation in tatters.This misfortune has befallen the nation because the conservative leadership, returned to power in three consecutive elections, betrayed the trust of the people. But this means that the majority of the population must also bear a part of the blame.

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POLITICAL FIRST-AID? Iceland and EU

Why should the European Union – or individual member states – worry about Iceland in her current distress? A country with a tiny population in the North Atlantic, on the margins, of Europe having fallen victim to an economic crash, which is beyond the nation’s means to recover from, on her own? Are there any interests involved, justifying that the EU should incur effort and expense – although a miniscule amount seen from the vantage point of Brussels – to help Iceland to recover from this major setback?

Does it change anything that Iceland has now, belatedly, presented a membership application to the Swedish Presidency, although the conservative power elite has hitherto maintained that the island nation would be better off outside the Union? Madame Joly, a member of the European Parliament and advisor to the special prosecutor, investigating the fall of the Icelandic banks, raises those questions for consideration in an interesting article, published 1st of August, in influential newspapers in France, the UK and Norway – as well as in Iceland. Because of her fame (some say notoriety) as a special prosecutor in the Elf-case, the biggest financial scandal of the post-war era in France, influential people listen, when Madame Joly speaks up. Her initiative in drawing the attention of the general public as well as influential persons to those issues is praiseworthy.

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ICELAND: FROM CRISIS TO RECOVERY

INTERVIEW WITH MR. JON BALDVIN HANNIBALSSON
BY WITOLD BOGDANSKY IN REYKJAVIK (JUNE 02, 2009).

The purpose of the interview is to present different opinions on present situation in Iceland, collapse of the Icelandic economy in 2008, issues such as membership of EU and EMU, economic situation, adoption of euro (or a different currency), NAFTA issue and others subjects.

Mr. Jon Baldvin Hannibalsson, is a very well known Icelandic politician: the former President of The Social Democratic Party (1984-1986), the former Minister of Finance (1987-1988) and Minister of Foreign Affairs (1988-1995), and later the Ambassador of the Republic of Iceland in the United States and Finland.

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DELORS´S BABY

The EEA-agreement is a product of the Cold War era. Five of us defined themselves as neutral or outside alliances. Two of us were NATO members, but suspicious of the European Union for different reasons.

We were small nations – in terms of population, but strong in terms of trade and economics. This awkward mix meant that we were marginal vis a vis the process of European integration. This gap had somehow to be bridged.

Jacques Delors – still today the greates tof the EU-presidents – was the consummate political fixer. In his time he had saved the Mitterand regime from floundering on the rocks of out-of-date economics. Now he proposed to square the circle with us.

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THE INTERNATIONAL FINANCIAL CRISIS: THE CASE OF ICELAND – ARE THERE LESSONS TO BE LEARNT

The text of this working-paper is an elaborated version of a lecture given by the author at a seminar held by the Faculty of Law and Economics of the Friedrich Schiller University at Jena in Türingen in Germany November 27, 2008.

The text has been revised to bring it up to date as of end of year 2008.

The text of this working-paper is an elaborated version of a lecture given by the author at a seminar held by the Faculty of Law and Economics of the Friedrich Schiller University at Jena in Türingen in Germany November 27, 2008. The text has been revised to bring it up to date as of end of year 2008.

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A LETTER TO MR. KAZICKAS

Mr.Kazickas is an American of Lithuanian descent. He published his memoirs with an account of his involvement in the struggle for the restoration of Lithuania´s independence. According to Mr. Kazickas’s story, Iceland´s role in support of the Baltic countries´ independence was explained as having been iniciated and orchestrated by the US through their ambassador in Reykjavik, Mr. Cobb.

Several high ranking leaders of the Baltic independence movement have told me that this was an official US attempt at historical revision, trying to justify that the Bush senior administration was very late in recognizing the hard won independence of the Baltic States.
I wrote this letter to Mr. Kazickas to put the record straight.

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MISSIONARIES OR MUSEUM-KEEPERS?

Ráðstefna um guðleysi, ásamt Richard Dawkins, Kaffi Reykjavík.
During my happy student days at Edinburgh University in the early sixties (the 20ieth century, to be sure) I once had the opportunity to attend the Labour Party annual conference as a representative of a radical student organization. I still remember the opening ceremony as vividly as if it had happened yesterday.

1.
During my happy student days at Edinburgh University in the early sixties (the 20ieth century, to be sure) I once had the opportunity to attend the Labour Party annual conference as a representative of a radical student organization. I still remember the opening ceremony as vividly as if it had happened yesterday.

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VILNIUS ROUND-TABLEWESTERN POLICIES TOWARDS THE RESTORATION OF INDEPENDENCE OG THE BALTIC COUNTRIES

Dear friends:
Once again congratulations from afar, from Reykjavík to Vilnius. I understand that you are commemorating the Seimas declaration of Lithuania´s restored independence, March 11, 1990. And assessing and evaluating the attitudes and policies of the Nordic countries towards those historical events across the Baltic Sea. It is high time that this important issue be studied objectively in a historical perspective. I wish you a fruitful discussion.

When the news of the Seimas declaration on the restoration of Lithuania´s independence reached Reykjavík, our parliament – Alþingi, the oldest parliament in the world – spontaneously adopted a unanimous resolution, supporting the declaration. An unequivocal message of this kind from the legislative body of one state to another is of course de facto recognition, if not de jure. It shows that Iceland was already at that time ready to accord full recognition to Lithuania´s independence. But that is not the point. In order to make the act of recognition politically significant – and irreversible – we had to make sure that other states followed suite. The purpose, of course, was to ensure the recognition of the international community, in order to enhance the security of Lithuania´s statehood.

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