Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page:

From The Socialist newspaper, 17 March 2010

Iceland: 93% reject bankers' bailout

Interview with Skúli Jón Kristinsson, CWI Iceland

We have seen recently some angry protests and demonstrations on the streets of Reykjavik. What is this "parliament of the street"?

People in Iceland are very angry about having to bail out their financial elite by paying for their debts abroad. There is strong indignation among them also about how the country is being bullied by the institutions of global capitalism.

Support for European Union membership has declined greatly among Icelanders because of how the "Icesave" dispute is being handled by the ruling powers of the EU. A climate of anger and distrust among Icelanders towards institutions such as the EU or the IMF has developed.

Another significant issue for many working class and middle layer households is the monstrous rise of their personal mortgage debts since the collapse of the bank system and decline of the national currency.

Many Icelanders face serious problems now with paying their mortgages and making ends meet. Their debts automatically rise with inflation, and consequently many households are facing bankruptcy, or are unable to make ends meet after paying off their loans.

Large sections of the population are therefore quite desperate and feel helpless. The government has done next to nothing to help those people. They haven't taken any steps to solve those problems facing ordinary people, while spending billions of Icelandic kronur in bailing out the bankers. So there is a very strong demand now in Icelandic society for some action to be taken, such as debt cancellation.

There have been demonstrations since December last year, where people have been calling for the cancellation of mortgage debts and protesting against having to pay the debts of bankers.

These demonstrations have been taking place more regularly and with more people participating since January. A new protest movement seems to be developing and escalating. The so-called "parliament of the street" is a newly formed umbrella organisation of different activist and grassroots organisations who have united in organising weekly 'demonstration meetings' in the centre of Reykjavik.

The organisations involved include the Icelandic section of Attac, the organisation for the defence of households, the Red Platform, the Icelandic Humanist Association and a group which fights for the interests of disabled people.

The demands they put forward are: for at least partial cancellation of debts on mortgages and households; abolition of the debt index; abolition of debts when people go bankrupt; the IMF out of the country; the "risk investors" who bankrupted the country to be held responsible for their actions; human values before profits; and more opportunities for the general public to have a say in how society is run.

The first demonstration this alliance organised was on the same day as the referendum. More than 600 people were there to protest against the "Icesave" deal.

You could feel a lot of anger and indignation from the people present against the bullying that is now taking place against Iceland.

What was the 'Icesave referendum' in Iceland (on 7 March 2010) all about?

We were voting on the law passed by the Icelandic parliament which would make taxpayers guarantee the repayment of the massive debts, caused by Icelandic bankers, to the British and Dutch states.

Icesave was the name of the online banks set up in Britain by Landsbanki, one of the big three banks of Iceland.

When the Icelandic banks collapsed in October 2008, the government passed emergency legislation to rescue their deposits. But those outside Iceland were not included. So the British and Dutch governments jumped in and paid €3.8 billion to bail out the depositors in their countries. Afterwards, they tried to claim it back from Iceland.

The majority in the parliament, led by Social-Democrats and the Left-Green Party, accepted that and passed the 'Icesave law'. The opposition, right-wing parties, don't oppose paying in general, but only argued that a better deal with the governments in Britain and the Netherlands would be possible.

But the president, Olafur Ragnar Grimsson, didn't sign this into law. Even though his position is largely symbolic, with little power, he has to sign all legislation which passes through parliament. According to the constitution, he can refuse to sign legislation and if that is done, it triggers a referendum. This is the first time it has ever happened, however.

The Icesave law is very unpopular. So, Grimsson refused to sign it, presenting himself as a real representative of 'democracy', even though, because of his previous policies, he was more seen and known as a representative of the bankers.

What was the result of the referendum?

The result was that 93% said 'No' to this bill. The turnout was 62%, much higher than expected. This marks a clear defeat for government policy.

The people who voted 'No' did so for a mixture of reasons. Some people completely oppose the idea of paying this money at all. Others hoped for a better deal with the British and Dutch governments.

The prime minister and the minister of finance said that the result didn't surprise them because they knew that the issue was unpopular. But they also claim that the referendum was meaningless because new negotiations with the British and Dutch governments had already started before the referendum took place!

The bank collapse turned Iceland from one of the richest countries to a bankrupt state. What did the government do?

It put forward this emergency legislation and brought in the IMF. The IMF demands that the Icelandic state should 'honour its obligations abroad'. But this debt was caused by the Icelandic financial elite and working-class and middle-class Icelanders should not have to pay it.

If Iceland pays the money to the British and Dutch states - as the IMF demands - it would be an equivalent of €48,000 per head of the population in Iceland. To be able to pay this money, the government has started to attack living standards, with cutbacks in health care and education.

A lot of people fear that Iceland could be reduced to a pariah status internationally if we refuse to pay the full amount. On the other hand, people are also afraid of the consequences for the economy and living standards if we pay the debt.

It is too soon to say what will happen exactly. But I think paying the so-called debt will have more serious consequences for workers and youth in Iceland than if we refuse to be bullied by the institutions of global capitalism.

I don't have any illusions in the government or the new negotiations. The best thing would be to mobilise people now for a generalised mass movement against paying these debts and against the power of the capitalist financial institutions.

The official left parties, like the Social-Democracy and the Left-Green Party, are not working-class parties. So we have to build a new workers' party. This will take time and effort, but it's the only plausible alternative.

After protests in the street, the old government had to resign in January 2009. After new elections in April 2009, a government of the Social-Democracy and the Left-Green Party was formed. Did anything change?

Not really. There were big hopes and illusions in the beginning. The new government continued the attacks on living standards and public services, but presents them in a milder form.

The 'Left-Green' minister of finance, Steingrimur Sigfusson, has now re-privatised the banks, which means he is responsible for the biggest privatisation in Icelandic history!

When people went onto the streets last year, they demanded the resignation of the government and new elections. They also demanded that the board of the federal bank should resign. Now a lot of people are disappointed because nothing has really changed after those goals were achieved.

The problem was that this movement was very spontaneous. It had no long-term goals. The unions were very passive - in fact, they were absent. So the movement brought down the government, but no social change has followed.

And, what changes do you want to see?

I'm in favour of an automatic rise of wages to keep pace with inflation. A cancellation of the debts of working people's households should be implemented.

Iceland should stop paying all foreign debts and defend its health care and education. The books of the financial institutions should be opened. We want to see where the money went to.

The nationalisation of the fishing industry and aluminium industry is necessary, under workers' control and management, to use the wealth of the country in the interests of workers and youth. The banks should be re-nationalised under workers' control.

How can this be achieved?

We need to put pressure on the government and fight the government by street demonstrations, strikes, and other forms of protest. We should stop the cutbacks and struggle to get the IMF out of the country.

The most important thing is that, if Iceland refuses to pay for that Icesave money, it can act as a model for resistance in countries in the neo-colonial world, or other countries in Europe, like Greece, which face similar problems and bullying. We need a global perspective of linking the struggle to that of other countries.

The working class and the youth should not have to pay for the crisis of the capitalist system. If we struggle together, Europe-wide and internationally, we can defend our standards of living against the onslaught of the capitalists.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.

In The Socialist 17 March 2010:

BA workers, civil servants: Defending jobs and conditions

Socialist Party workplace news and analysis

Support British Airways cabin crew

PCS Budget Day action

'Winners' and losers in Royal Mail deal

Workplace news in brief

The state

State infiltration - a warning to the workers' movement

Youth fight for jobs

Youth Fight for Jobs day of action

Unison witchhunt

Unison leadership's "scorched earth policy"

Socialist Party news and analysis

Coventry: Voters need socialist fighters - not service cutters

Free the Tamil refugees

Tube Lines: Another fine mess

News in brief

Socialist Students

Defend higher education

Defending public education in the USA

International socialist news and analysis

Another general strike brings Greece to a halt

Socialist Party inteview

Iceland: 93% reject bankers' bailout

Marxist analysis: history

Thatcher's enemy within: 25 years after the end of the miners' strike

Trade Unionist and Socialist Coalition

Trade Unionist and Socialist Coalition

Workplace news and analysis

Surrey workers fight cuts

Fighting the cuts at Leeds University

Unite to save Northcott Theatre

Socialist Party feature

Cuts mean poorest people priced out of the legal system


Home   |   The Socialist 17 March 2010   |   Join the Socialist Party

Subscribe   |   Donate  

Related links:


triangleInternational Panama Papers protests

triangleCapitalist crisis: 'Up to half of all Icelandic families are bankrupt'

triangleHuddersfield & Halifax Socialist Party: Iceland, the default

triangleIceland debt crisis: Make the 'dirt bags' pay!


triangleNorthern Ireland: strike action by NHS workers

triangleSocialism 2019 rally: "Socialist change needed to end climate change"

triangleNew book: In Defence of Trotskyism

triangleEnd repression in Chile - freedom for soldier David Veloso


triangle10 years since the financial crash - the socialist answer to capitalist crisis

triangleThem & Us

triangleTurn Carillion crisis into movement against privatisation and capitalism


triangleCapitalist 'democracy' v socialist democracy

triangleTories in tatters: Corbyn must seize the time


triangleThe Great Big Socialist Party Quiz 2019


triangleImperialist tensions escalate as world economy teeters




South Africa

South African Airways workers win wage increase after strike action


Hong Kong

Hong Kong's uprising


Sri Lanka

Sri Lanka: Presidential election sees return of dictatorial Rajapaksa clan



Regime's fuel price rise sparks massive protests across Iran



Amazon bosses defeated in Seattle - Kshama Sawant reelected



Chile revolt continues: read eyewitness report



Bolivia: Right-wing coup ousts Morales


Kshama Sawant

Kshama Sawant reelected in Seattle



End repression in Chile - freedom for soldier David Veloso



Chile in revolt



Chile: An outpouring of rage against the capitalist system



Solidarity with the Kurdish people



Catalonia: Draconian prison sentences of independence leaders provokes mass protests and strikes



China at the crossroads: 70 years since the declaration of the People's Republic of China



Massive protests against Lebanon's corrupt elite

triangleMore International articles...

Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube



Phone our national office on 020 8988 8777


Locate your nearest Socialist Party branch Text your name and postcode to 07761 818 206

Regional Socialist Party organisers:

Eastern: 0798 202 1969

East Mids: 0773 797 8057

London: 020 8988 8786

North East: 0784 114 4890

North West 07954 376 096

South East: 020 8988 8777

South West: 07759 796 478

Southern: 07833 681910

Wales: 07935 391 947

West Mids: 02476 555 620

Yorkshire: 0114 264 6551



Alphabetical listing

December 2019

November 2019

October 2019

September 2019

August 2019

July 2019

June 2019

May 2019

April 2019

March 2019

February 2019

January 2019