Thursday, 9 October 2008

Iceland and the axis of evil

"The half wit does not know that gold
Makes apes of many men:
One is rich, one is poor,
There is no blame in that.

Those words, translated by W.H. Auden and Paul B. Taylor, come from 'Hávamál', also known as 'The Words of the High.' The earliest manuscript version comes from around the year 800 but the poem probably pre-dates Christianity in Iceland as the words are ascribed to the god Odin.

I've wanted to visit Iceland for many years - even before I saw pictures its mountains, plains and geysirs. The starting point was Auden and MacNeice's travel book, Letters from Iceland, which combines comedy with an underlying seriousness - Iceland is a place of sanity in a world rapidly going mad.

The Iceland Auden and MacNeice visited was a relatively poor country. Since I've wanted to go there, it has seemed too expensive. Every so often I leaf through a travel brochure or visit tourist websites and then the prices deter me. I don't want a weekend break - I want to see Iceland properly and learn enough of the language to get by, but that's far too expensive.

Britain's relationship with Iceland has been awkward. I remember the antagonisms of the Cod Wars, especially the third Cod War in which Iceland claimed that its unilateral extension to its coastal waters was an attempt to stop overfishing. Iceland may have had a point as the seas have certainly been overfished since then, but Icelanders were portrayed in the press as unpleasant, violent people trying to grab territory from poor British fishermen.

Later the image changed - the Icelanders were cool, sophisticated people wandering through trendy Reykjavik and swimming in the Blue Lagoon. I was never quite convinced by that. I had, at least, glanced at a copy of a novel by Halld
ór Laxness and the Icelandic people he described didn't seem quite like that.

I hadn't noticed the rise of Icelandic banks. I don't worry too much about where my money is held, so long as the bank operates efficiently. I know I ought to take more trouble about ethical accounts but I've been defeated by the effort entailed in switching to the Co-op, though I do have an ISA with Triodos. The safety of money seems a matter of luck and quite beyond my control - if it vanishes, I'll have to do without it.

The crash in Iceland took me by surprise and the ripples shook me. I hadn't realised Icelandic companies owned so much - or, it turned out, owned less than nothing. The assets seem to be cancelled out by liabilities and the government has stopped trading on the stock exchange and presided over the closure of the banks.

Poor Iceland - it seems that the country is in debt to the rest of the world. That debt amounts to £116,000 for every man, woman and child in the country. And Gordon Brown is threatening to sue for British assets.

I don't know how one country sues another. I don't know how Iceland is supposed to pay the rest of the world for the money lost by its banks. I can see that there's an argument about where the money should be, just as there was with Lehman Brothers. Lehman was accused of sending money out of Britain to privilege debtors in the United States - but Lehman is old news now.

I'm slightly shocked to find that the British government is using anti-terrorism legislation against Iceland. At 10.00 this morning, Gordon Brown enacted a Statutory Instrument under the Anti-terrorism, Crime and Security Act 2001. It was called the Landsbanksi Freezing Order 2001 and it came into force 10 minutes later - one hour and fifty minutes before it was laid before Parliament. The Home Office website is clear on the purposes of the Act. It was introduced to "cut off terrorist funding" and improve security. It was even meant to aid European co-operation. And it was introduced in response to the shock of 9/11, without the detailed debate and analysis that would be usual.

It may be necessary to act quickly on funds. But we were told that this law, like so many others, was introduced to keep us safe from terrorists - to prevent another 9/11. Has Iceland suddenly joined the Axis of Evil?

I find I'm impressed by the behaviour of ordinary Icelanders, as reported on the BBC. And there's something moving about the behaviour of the Icelandic rock star, Bubbi Morthens, who convened and performed at a free concert opposite the parliament building, asking people to stand together. Bubbi Morthens has lost money too. He spoke of a "new reality" and the possibility of a "new dawn". The language is too vague for me to be sure about what he means - there could be implications I've missed. But this does seem a time for people to stand together and face reality - and to think about how society must change. I just hope that what emerges is a more just and kinder society.

Meanwhile, here's Bubbi Morthens performing in Copenhagen (mostly in English) in 2007.


Anonymous said...

There's a very informative page here explaining all about bank-deposit protections in the UK. Scroll down to "passport scheme" on the origin of the Icesave crisis.
The story of Iceland suddenly being in debt by 5-10 years of their GDP sounds strangely familiar: a small group of people (in this case Icelandic banks and their overseas affiliates) manages to go insanely bankrupt, and then by a cunning sleight of hand, the losses are "socialized" to the entire population! Welcome Icelanders, to the story of Third-World Debt. Wonder which small country with big banks will be next? Hmm...

Kate J said...

It's actually very easy to to the Co-op... I did it fairly recently - the account was set up in about 3 days,the staff were very helpful and friendly,there's a phone number listed for each branch (unlike Barclays or Lloyds, where to make an appointment to see someone at your own branch you have to go via India...). I also recently had to deal with Barclays (my mother banked there and I'm her executor) - they took over 2 weeks, lost my documents, and when I finally got the cheque book they had mis-spelt my name! The Co-op sent me a simple form and will deal with transferring pension payments, direct debits, the lot.
And there are branches in the town where I know you live and work. Enjoy!

Kathz said...

Thanks for the link and comments.

The difficulty isn't opening a Co-op account - it's transferring pay and standing orders and managing the switch between accounts. Mind you, I doscovered the other week that I don't have a brilliant credit rating. This is probably because I don't have a car and try to avoid debt - if I had a number of loans I'd be judged more credit-worthy!