Action Against Bankers in Iceland | Jóhanna Sigurðardóttir

The People Said "No" to the Banks

By taking direct action against greedy bankers and corrupt politicians, the people of Iceland have shown the world how to beat the economic crisis.

As in so many places in the world, in 2008, Iceland’s economy was on the brink of collapse. But unlike the rest of us in the US and here in the EU who had to cough up taxpayers' money for enormous bank bail-outs, suffer government cutbacks, repossessions, business closures, and high levels of unemployment, the people of Iceland simply said “No”. The people of Iceland took non-violent action against the powers that were responsible for the failing Icelandic economy and won the battle against corporate crime. How did they do it?

But first a few facts about Iceland.

A famous Icelandic hot water geyser
A famous Icelandic hot water geyser | Source

About Iceland

Iceland is the 18th largest island in the world, with a population of about 320,000 on a surface area of 103,000 km² (40,000 square miles). Iceland is warmed by the Gulf Stream with a temperate climate despite its high latitude just below the arctic. Its houses are heated by geothermal energy. With voter turnout at 84% compared to a 72% average Icelanders are politically more involved than most nations. Iceland has low taxes compared to other countries yet provides free health care and education. Best known for its fishing industry, Iceland’s economy is largely based on financial services and investment banking. So what went wrong?

Sequence Of Events

Iceland is in Financial Crisis - Iceland is bankrupt. The nation's entire banking system fails, resulting in substantial political unrest.

When the Icelandic banks, like so many banks in the world, can no longer roll over their loans, when creditors demand payment, the collapsing banks go begging from the lender of last resort, the Central Bank of Iceland. However, the banks debts are so much larger than the national economy that neither the Central Bank of Iceland nor the government has enough in the kitty to guarantee the banks' debts. This leads to the bankruptcy of the banks. The currency devaluates and the stock market closes.

October 2008 Banking Crisis The Icelandic government announces the nationalization of the country's largest bank, Kaupthing.

November 2008 About 6000 Icelandic people march peacefully in Reykjavik in front of parliament demanding the resignation of Prime Minister Geir Haarde and central bank governor David Oddson. The prime minister and his whole government resign.

Why Can't We?

Now, why can Londoners or New Yorkers not do the same? We have all heard of the "Occupy the World" movement by what they call themselves, the 99% of the population. It may be possible to learn from what happened in Iceland and follow suit. It is easier to change a small country than a larger one, but if they could do it, why can't we?

Official Portrait Johanna Sigurdardottir
Official Portrait Johanna Sigurdardottir | Source

Jóhanna Sigurðardóttir - Former Prime Minister of Iceland

Jóhanna Sigurðardóttir was born 4 October 1942. She studied at the Commercial College of Iceland, a vocational high school operated by the Chamber of Commerce.

1960, she worked as a flight attendant with Loftleiðir (a predecessor of Icelandair) and was active in the trade union movement.

1970 Jóhanna married Þorvaldur Steinar Jóhannesson in [38] and the couple had two sons named Sigurður Egill and Davíð Steinar (born 1972 and 1977).

1978 became an MP and minister of Social Affairs and Social Security.

1987–1994 and 2007–2009. She has been a member of Iceland's parliament for Reykjavík constituencies since 1978, winning re-election on eight successive occasions.

1990s, when she lost a bid to head the Social Democratic Party, she raised her fist and declared "Minn tími mun koma!" ("My time will come!"), a phrase that became a popular Icelandic expression.

1 February 2009 Jóhanna Sigurðardóttir became Iceland's first female Prime Minister and the world's first openly lesbian head of government. Jóhanna is a social democrat and Iceland's longest-serving member of Parliament.

In 2009, Forbes listed her among the 100 Most Powerful Women in the world.

In September 2012, Jóhanna announced she would not seek re-election and would instead retire from politics.

1987 divorce

2002 Jóhanna joined in a civil union with Jónína Leósdóttir, an author and playwright.

2010, when same-sex marriage was legalized in Iceland, Jóhanna and Jónína changed their civil union into a marriage, thus becoming one of the first same-sex married couples in Iceland.

26 January 2009

The public pressure forces the coalition government to resign over the handling of the financial crisis. A week later a new left-wing government immediately sacks Central Bank governor Davíð Oddsson and his collaborators.

April 2009

An investigation is opened to prosecute those responsible for the crisis. Iceland's state prosecutor hires an economic crime team to investigate suspicions of criminal actions by several of Iceland's business and banking leaders.

July 2009

Iceland applies for membership in the EU to raise the credibility of the country to international financial markets. EU officials mention 2011 or 2012 as possible entry dates. Although the European Commission said in January 2013 that it "... continues to be convinced that the E.U. accession of Iceland would be of mutual benefit ...”, Iceland is still not in the EU today.

Nordic donkey
Nordic donkey | Source

March 2010

The twice bailed out, a corrupt banking sector in Iceland demands Icelanders to pay back debts created by themselves. The amount of money demanded per capita was $3000/year for 8 years, children and elderly people included. Iceland’s president organized a referendum on the matter, asking his people if they agreed, with a simple yes or no, to pay back such debts? The people vote “No”. The referendum and the denial of the debt payment are voted in by 93% of the population.

One year after this referendum, the main debtor bank finds as if by magic, the $7.2 billion it owes to its creditors. Many high-level bankers and executives are charged and arrested. If the answer to the referendum had been "yes we agree to pay the debt" would the banks have found this money?

Summary of the Icelandic Financial Crisis

  • Peaceful demonstrations
  • Resignation of the whole government
  • Nationalization of the major banks
  • Referendum so that the people can decide over the economic decisions
  • Rewriting of the constitution by its people
  • Incarceration of the responsible individuals

February of 2011

The constitutional assembly presents the ‘carta magna’ from the recommendations given by the different assemblies happening throughout the country. In this crisis, an assembly is elected to rewrite a new Constitution which can include the lessons learned from this, and which will substitute the current constitution (a copy of the Danish Constitution). United Nations' Human Development Index ranks Iceland as the 14th most developed country in the world and the 4th most productive country per capita.

Do you ever hear any news from Iceland through the main media?

See results without voting

Iceland Today

In the new constitution, there is room for 522 candidates with no political affiliation. All you need for candidacy is to be an adult and have the support of 30 people.

Today Iceland is the first of Europe's financial recovery success stories with unemployment down to 6.3% and almost 3 years of economic growth. Central government debts were stabilised at between 80/90 percent of GDP.

With nearly a third of the current parliament made up of women, a 40% female ratio on every major party list compared to a global average of 16%, Iceland's financial position has steadily improved since the crash. The United Nations' Human Development Index ranked Iceland as the 14th most developed country in the world and the 4th most productive country per capita.

"Nobody Can Change Things Except YOU"

Birgitta Jonsdottir speaks about freedom of information

Why Can’t We All?

Iceland has shown the world how to beat the economic crisis. There is a way to cure the infected financial system by sacking corrupt politicians and prosecuting criminal bankers who gamble depositors’ money away, invest in unethical schemes, pay themselves gigantic bonuses, and then expect taxpayers to save their oversized backsides when they lose control. Iceland has given the world a working example of true democracy. If Iceland can do it, why can’t we all?

To Conclude

I hope you gained some insights on how to beat the economic crisis, by following the way that Iceland took action against its corrupt bankers. Feel free to share your ideas in the comments section below.

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© SUE ADAMS 2016 - You may link to this article, but you may Not copy it. Copied content will automatically be found by Google Alerts and may result in your entire blog/website being closed down.

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Comments 14 comments

Sanxuary 19 months ago

Ice land is like a number of countries that became off shore bank accounts. They still exist and like Ireland and Crete the countries where the money is actually at is being forced to be balanced in the economies where it was made. Numbers on a screen were simply erased and the criminal business off shore banking got a blank account. We still have no real currency and its just numbers on a screen. We still have no rules that will prevent it from happening again, its just a new game.


Sue Adams profile image

Sue Adams 4 years ago from Andalusia Author

How right you are Lifeisviewtiful, but I think that if enough people were better informed and were willing to take pro-active steps like for example taking their money out of the big banks and transferring funds to local co-ops, then change would happen, even in America.


lifeisviewtiful profile image

lifeisviewtiful 4 years ago from Merced, California

This is an incredibly well done hub on iceland. This will never happen here in the US, due to the sheep like trance of the average american citizen. Iceland has shown us how this is to be done. Iceland is the perfect example. We need to hold these criminal bankers responsible for this mess that they have orchestrated. Everyone keeps saying "well, this is how it is. This is life, you have to work and earn a living when bankers create money out of thin air". This is false, it's time to wake up!


sannyasinman profile image

sannyasinman 4 years ago

Voted up! Keep the information flowing.


juneaukid profile image

juneaukid 4 years ago from Denver, Colorado

Thank you Sue Adams for this hub. We just returned from Iceland and found their economy to be strong but even stronger were Icelandic people themselves and their marvelous landscapes.


Sue Adams profile image

Sue Adams 4 years ago from Andalusia Author

Madeleine,

Banks go bankrupt for two main reasons: a) when they make bad investments (gamble depositors' money away), and b) when they fail to recoup the money they lend irresponsibly to people who cannot repay their debts. Putting your money in an irresponsible bank has its risks, hence the emergence of the "Move Your Money" movement where people are looking to use smaller, more ethical, local, financial institutions like cooperative banks and building societies that invest in real production and lend to small businesses.


Madeleine 4 years ago

You are forgetting that the people who invested their money in the Icelandic banks (with the Icelandic government guaranteeing their deposits) are people like you and me, average Joes. So it looks like the Icelandic people are making you and me pay for what their government did wrong. Is that right?


Sue Adams profile image

Sue Adams 4 years ago from Andalusia Author

Yes Matt, thanks, spread the word.


Matthew Kirk profile image

Matthew Kirk 4 years ago from Liverpool

Have shared this on my Twitter :)


Sue Adams profile image

Sue Adams 4 years ago from Andalusia Author

Thanks for the link Jupiter. A very goo, more in-depth article on the Iceland revolution. I especially like this bit:

"The most important factor of their approach, however, is that every step of the way they have put their own people before the markets. This is essentially the polar opposite of what we have seen so many other nations do in response to debt crises.

The Icelandic government basically left international creditors to deal with their failed loans on their own, removing all responsibility from their own people."


nextstopjupiter profile image

nextstopjupiter 4 years ago from here, there and everywhere

I just found this article which I would like to add http://wakeup-world.com/2012/05/25/the-silent-revo...


nextstopjupiter profile image

nextstopjupiter 4 years ago from here, there and everywhere

POWER TO THE PEOPLE, ... and not to the financial mafia. Iceland is an excellent example how it can work. Thanks for this hub!


Sue Adams profile image

Sue Adams 4 years ago from Andalusia Author

Thanks Josak, the other thing we can do apart from marching and lobbying, is to vote with our wallets. My next article is going to be about "Move Your Money", from the giant ogre banks to smaller, local cooperative financial insitutions.


Josak profile image

Josak 4 years ago from variable

Agreed, Iceland and the other Scandinavian nations are showing the world the way in many areas particularly when it comes to putting people before the interests of big money, this is an excellent example.

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