Iceland

Devastated by global crisis

www.socialistworld.net, 26/01/2009
website of the committee for a workers' international, CWI

Demonstrations of anger bring down government

Per-Åke Westerlund, Rättvisepartiet Socialisterna (CWI Sweden)

A few days of demonstrations, including protesters throwing eggs being met by riot police with teargas, have been enough to force a new election in Iceland. The mass protests in what is, to date, the worst hit country in the global economic crisis, have been referred to as a revolution – a ’fleece’, ’facebook’, or ’saucepan’ revolution. Among those who have come onto the streets, there are discussions about the need for a new political force.

On Monday 26 January, the government handed in its resignation. This was clearly an attempt to defuse the protest movement. So was the proposal from resigning pm Haarde of a "national unity government".

It is only three months ago, in early October, that Iceland went from being the fifth richest country in the world – based on GDP per capita – to experiencing the worst crisis of all countries, so far. The super-indebted Icelandic banks were nationalised in an attempt to limit the crisis. Today, 70 per cent of all companies and 40 per cent of households are technically bankrupt. GDP is expected to drop 10 per cent this year. Unemployment increased from six to nine per cent in December alone, inflation is close to 20 per cent, while interest rates are 18 per cent. The currency, the Icelandic krona, is hardly exchangeable.

Widespread hatred

There is a widespread hatred against the bankers who orchestrated the crisis and their friends, the politicians. While the top bankers seem to have left the country, however, the politicians remained in power. This changed last week.

From Tuesday, 20 January, when parliament restarted after the holidays, daily protests were organised. The main slogan was "incompetent government" and the demand was for new elections. Most people brought cooking pans and other improvised objects to drum on.

Last Wednesday, the protest took place outside a meeting held by the Social Democratic Alliance, a junior partner in the coalition government, demanding that the SDA resign. Later the same night, protesters surrounded the limousine of Prime Minister Geir Haarde, knocking on the car roof and throwing eggs and drink cans. Riot police were used to defend Haarde, who is also leader of the Independence Party. At that stage, he still ruled out any elections before those scheduled for two years’ time in 2011.

In protests late at night on Thursday, stones were thrown at the police, with two policemen injured. The police used teargas and pepper spray and 20 people were arrested in the first major attack on a demonstration since 1949, when Icelanders demonstrated against NATO membership. It has been reported that the government of Iceland, which has only a handful of soldiers, was considering calling in Norwegian forces.

The Icelandic website, Ice News, quoted one of the protesters:

"No one has resigned and no one has been fired. They are hard at work at getting what little is left here back into the hands of those who crashed our economy to begin with.

”The people here are afraid and at the mercy of ruthless criminals that have feathered their nests not only in our government, but also in the businesses and banks. These banks were given to them through a fake privatisation in 2005, they have literally done nothing but spend money since; now it´s all gone, and you want to give them more?".

The protester referred to the demand of the demonstrators that money promised from the IMF and governments should not be paid out to the present government. In total, ten billion US dollars has been promised in "rescue packages". The IMF deal includes severe demands for budget cuts and high interest rates, both measures that will deepen the crisis.

New elections

On Friday, Prime Minister Haarde suddenly declared new elections for 9 May. At the same press conference, he announced his resignation as leader of the Independence Party, revealing that he has cancer. Already, the leader of the Social Democratic Party, Foreign Minister Ingibjorg Solrun Gisladottir, is being treated for cancer. The following day, Minister of Commerce, Bjorgvin Sigurdsson, resigned at the same time as he sacked the boss of the state authority responsible for financial supervision.

These announcements, however, did not break the momentum of the protests. On Saturday, over 6,000 people gathered, demanding the government resign immediately.

"We will not allow more crap. The government must go. We’ve had enough of them controlling everything, just taking care of themselves and not caring at all for the people", said one of the speakers, Jakobina Olafsdóttir, to great cheers from the crowd. The Swedish daily, Dagens Nyheter, continued its report: "She and others in Iceland want to see a new society, without the cronyism and corruption they believe is prevalent and without the for so long so mighty Independence Party."

The same article continues: "Different protest movements have mushroomed. With the help of Facebook". [Ninety six per cent of 20-29 year-olds are on Facebook.] "They quickly gather thousands of supporters and can easily call meetings. Now, there are discussions between the different movements to form a common manifesto for a new society."

In opinion polls the opposition Left-Green Party has doubled since the last election two years ago, to 32.6 per cent. The two governing parties have lost a combined 22 per cent. The Independence Party’s ratings have fallen to 22.1 per cent and the Social Democratic Alliance to 19.2 per cent. A previous partner of the Independence Party, the Progressive Party, has also increased in opposition, from 11.7 to 16.8 per cent.

This is a clear indication that people are looking for a more radical alternative. The Left-Green Party are seen as the most anti-capitalist party, previously profiling themselves mostly on environmental issues. For example, the party advocates nationalisation of all natural resources. The Left-Greens also stand for re-negotiations on the IMF deal and for Iceland to leave NATO. Opinion in favour of joining the European Union, which surged when the currency collapsed last year, has already started to dwindle. Today, 38 per cent want to join, compared to over 50 per cent in October. Many have understood that foreign aid will not come without strings.

Revolution?

The mass demonstrations in Iceland, like recent protests in other European countries, show the willingness of people to try and take control over their own lives. They no longer trust politicians or capitalists. At the demonstrations in Reykjavik, the boss of the Central Bank, David Oddsson, a previous prime minister, has been compared to Adolf Hitler!

It is clear that the protesters have had enough and that they are representative of the generally-held feelings in Iceland. This has given rise to a lot of discussion about whether what is happening is a revolution.

“The word ‘revolution’ might sound a bit of an overstatement, but given the calm temperament that usually prevails in Icelandic politics, the unfolding events represent, at the very least, a revolution in political activism", Icelander Eirkur Bergmann wrote in the British paper, The Guardian.

Another recent visitor to Iceland, London School of Economics professor Robert Wade, commented, "The situation is very tense and very unstable". He compared the situation with other sometimes-violent street demonstrations in Bulgaria, Hungary, Latvia, Lithuania and Greece over the last month.

A third commentator, Fredrik Erixon of the Brussels-based European Centre for International Political Economy, said the situation was reminiscent of "the French Revolution of 1789", rather than that of 1968. The anger is certainly there, but capitalist Iceland is far different from feudal France.

The lesson from mass movements in other countries in recent years is that unpopular regimes can be overthrown. But to alter the economic and political conditions in society the working class and its allies need their own party with a programme for socialist change.

In Iceland there will be a concerted campaign from national and global capital to submit to the IMF conditions, including economic blackmail. Any government that is not prepared to challenge the capitalists who have caused the crisis will come under enormous pressure to make huge cuts in living standards for working people. This is the case even if a Left-Green government is established, or a government of "experts", as some of the protesters have proposed.

Workers and youth in Iceland have already drawn important conclusions. New experiences will force them to look hard for alternatives. Transforming the situation in Iceland would need a fully socialist programme of nationalisation of all major parts of the economy, under democratic workers’ control and management. The crisis has shown that bankers, capitalists and today’s top politicians are not wanted; democratically elected organisations of workers, youth, pensioners could run society without them. The beginnings of a movement against capitalism in Iceland must be welcomed and encouraged by workers and activists internationally. This is just the first indication of what is to come as more and more countries fall into recession and mass revolt begins to develop.