WHEN WILL THEY EVER LEARN? The crash 2008 (HRUNIÐ) revisited, three years later.

What was Iceland like before HRUN (crash)? What were the main causes of the crisis? Is anyone responsible? A few conspiracy theories. What are the main consequences? Are there any solutions? Are there any lessons to be learnt?

What was Iceland like before?:

While Europe was devastated during World-War II, Iceland became rich. Despite receiving Marshall aid twice per capita what war-torn countries in Europe received, Iceland continued to maintain a closed and protectionist system: Imports were restricted, exports were licenced, prices were state-regulated, fishing was heavily subsidized, the krona was regularily devalued by government fiat, banks were state-owned, directors of banks and funds as well as other high officials were political appointees, inflation was rampant, real rate of interest was negative, receiving loans was based on political favouritism. Coalition governments were, with rare exceptions, lead by the two major parties: The Independence Party (conservatives) and the Agrarians (who called themselves progressives). Those two parties between them ran a spoils-system (crony-capitalism). All major business (exports/imports, banking, insurance, retail, oil-distribution, and the spoils of servicing the US- naval base) were devided between companies run by party loyalists. This had nothing to do with a free-market system. This was a corporatist system (cf. Mexico), where political power was used by two dominant cliques to distribute favours to party loyalists. It was a politically administered oligopoly. This system was by definition corrupt at the core, but with widespread popular participation.

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20 YEARS OF ESTONIA´S RESTORED INDEPENDENCE

Your struggle to restore Estonia´s independence, more than 20 years ago, was not merely a reassertion of nationalism; not only an effort to preserve your language, culture and national identity;

It was also a democratic revolution – a final settlement of the second world war in Eastern Europe, and an endgame in the Cold War.

An endgame in the Cold War – that is where your secession from the Soviet Empire came into conflict with Mr. Gorbachev´s overall aim – to keep the Soviet Union together at all cost. – It was also in conflict with the realpolitik of Western leaders: to end the Cold War with the USSR; to reach new agreements on disarmament and arms control; to liberate Eastern Europe; to negotiate the peaceful reunification of Germany. And for the US, to secure Soviet complicity towards the 1st U.S. invasion of Irak in January, 1991.

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INTERNATIONAL SEMINAR IN GERMANY ON “FREEDOM”.

May 13 – 22 this year 400 students of more than 40 nationalities came together in Thüringen in Germany to share experiences and exchange opinions on freedom. The hosts were a network of universities in Ilmenau, Weimar, Jena and Erfurt – the old academies of Goethe and Schiller. This was the 10th seminar of this kind being conducted by those universities during the past 20 years – or since the fall of communism. For a period of ten days the inhabitants of those cities open their homes to their foreign guests. By doing so they form contacts between the German hosts and the foreign students which often turn out to be lasting relationships – long after the visitors have returned home.

This seminar is held every other year. Each time a major theme is elected for “in–debt” research and investigation. This time the theme was freedom. Ten lecturers introduced the subject. They dealt with the philosophical definition of the topic; the history of freedom, political freedom, developement of human rights, freedom and basic human needs, individual privacy vs. the security of the state, freedom of markets vs. social responsibility, the limits of freedom, e.g. due to cultural traditions or lifestyles, freedom and religion, and finally freedom within scientific research and in the arts.

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In Search of Freedom: IT´S ALL ABOUT EQUALITY, STUPID!

“Liberté, Egalité, Fraternité” (Battle-cry of the French revolution)

“Freedom can not consist of a privilege of the few – to the exclusion of the many” (Olof Palme, Swedish PM)

“ Með lögum skal land byggja, en ólögum eyða” (“Under the law we build the land – without the law, we destroy it” – Ari fróði, an Icelandic 11th Chistorian)

1.

I hail from a people whose founding fathers claimed that they left their homelands (the heartland of Scandinavia, Scotland and Ireland), rather than succumb to the authority of the Norwegian king. This was in the 9th Century, during the Viking Age, when Norway was being unified by force into a single state.

The lesser chieftains and small landholders were faced with a choice: To swear allegiance to the superior authority of the emerging monarchy (and accept the royal prerogative of taxation) or to run for their lives. They opted for the latter choice.

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YOU OWE IT TO THEM

Jón Baldvin er heiðursgestur Seimas (lítháiska þjóðþingsins) í dag.
Hér fer á eftir ræða hans við það tækifæri.

I.
How often haven´t we heard the high and mighty of this world pay lip service to the noble ideals of our western political heritage: Freedom, Equality, Solidarity, Democracy, National Self-Determination, the Rule of Law, – Justice for all.

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A REPUBLIC AT CROSSROADS

Haukur Magnússon, the editor of GRAPEVINE, an English language publication in Reykjavík (published in 25.000 copies) asked me to review the first decade of the 21st century in Iceland from a political perspective.
I spent the quiet Christmas days composing the following piece for Grapevine. I take note of the fact that the editor and I are both from Ísafjörður. Actually we are distant relatives and can trace our familyties to Ögur in Ísafjarðadjúp. The editor´s mother is a former student of mine at MÍ. And once upon a time Bryndís and I lived in the same house, where the editor´s parents are now living in Ísafjörður. Remarkable!

The First Decade of the 21st Century in Retrospect

Will October 6th 2008 (the day Iceland´s luckless PM Mr. Haarde, asked God to help his poor nation since he himself couldn´t) live on in our collective memory as a “day of infamy” – a sort of Iceland´s Pearl Harbour?

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In Fulbright´s Honor

Ræðan sem hér fer á eftir var flutt í hófi sem haldið var á Hótel Hilton, 13. 11. í tilefni af 50 ára afmæli Fulbright stofnunarinnar.

This is a rare event. We have come together here tonight to honor the memory of a good man, senator William Fulbright of Arkansas. He was that rare phenomenon – a visionary politician – a man of ideas and a man of action. Those qualities seldom go together in the same person – something we have been reminded of with a vengeance, recently.

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SOLIDARITY OF SMALL NATIONS

Erindi flutt á hátíðarsamkomu Háskólans í Vilníus, í tilefni þess að í dag eru liðin 20 ár frá því að Seimas, þing Litháa, lýsti yfir endurreistu sjálfstæði sínu.
Lagðar voru fjórar spurningar fyrir höfund. Svörin far hér á eftir.

The attached lecture was given today at a seminar at the University of Vilnius on the occasion of the 20 year anniversary of the Seimas declaration of the restored independence of Lithuania.
The lecture covers the four questions asked by the organizers.

1.

Why did Iceland get so deeply involved in the Baltic nations´struggle for their restoration of independence in 1989-91?

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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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