海角大神

Looking on as Greeks took to the streets in recent days in protest at an economic crisis often blamed on powerful individuals and forces beyond the control of ordinary citizens, many Icelanders must have felt a sense of d茅j脿-vu.

A little more than a year has passed since Iceland became the 2008 global financial meltdown鈥檚 worst casualty when all three of its major banks collapsed and the government was toppled.

While the spotlight this week fell on Athens, where the rulers of debt-stricken Greece are braced for a public backlash against severe spending cuts and hundreds of finance and customs ministry workers took the streets on Wednesday to protest budget cuts, those behind Iceland鈥檚 own citizen uprising against their country鈥檚 banking and political elites insist that anger is still bubbling away here.

鈥淲e are not asking for people to be executed but we want them to face the consequences for what they did,鈥� says Hordur Torfason, a folk singer and key instigator of the "saucepan revolution" 鈥� so called because of the kitchen implements participants took along to bang outside Iceland鈥檚 parliament.

Sipping coffee in a bustling cafe yards from where he led the protests, Torfason indicates that the next spark for a resurgence in popular anger may be just weeks away.

In what could be a perfect political storm, an eagerly-awaited official report into Iceland鈥檚 "riches to rags" economic crisis will be published days before a referendum planned for March 6 on a hugely unpopular deal to pay billions of dollars to Britain and the Netherlands arising from the collapse of an Icelandic online bank.

The poll was initiated when Iceland鈥檚 president refused to endorse the "Icesave" package, named after the bank which had offered high-yielding accounts to British and Dutch customers who were subsequently reimbursed by their own governments. Icelandic foot-dragging on paying that money back has caused a vital $4.6 billion International Monetary Fund-led loan to be frozen.

Dire warnings

Ahead of the vote, a battle for the nation鈥檚 hearts and minds has been underway with Iceland鈥檚 prime minister, Johanna Sigurdardottir, warning Iceland would effectively be opting out of the international financial system if it were to say no to the deal.

In addition, a "no" vote to the Icesave deal would also spell the end of Iceland鈥檚 hopes of joining the eurozone 鈥� a crucial difference between its predicament and that of Greece, with investors expecting a bailout for Greece from wealthier eurozone partners like France and Germany. Sigurdardottir鈥檚 opponents claim Iceland has every right to reject the deal, accusing Britain and the Netherlands of bullying the smaller country into unfair terms.

Weekend reports said Iceland is to meet Britain and the Netherlands in London on Monday to present a new proposal for repaying the money owed from the Icesave debacle, with the Icelandic government hoping to avoid the need for a divisive referendum and unlock the IMF aid. But with the UK and the Netherlands also facing testing economic times it remains unclear if they will be willing to give Iceland a break.

The battle is taking place at a grave time.

The President鈥檚 actions led the Fitch credit ratings agency to downgrade Iceland鈥檚 sovereign debt status to "junk," unemployment has risen past 8 percent, and many face losing homes when a moratorium on repossessions runs out later this year, particularly those with expensive foreign currency loans.

Against this backdrop, commentators like Egill Helgason say opposition to the Icesave deal is being manipulated to stage a revival by the right-of-center Independence Party, which oversaw a boom-time era of light-touch regulation and privatization during the 18 years it ruled until its ouster last year.

鈥淏asically they have won the propaganda battle to rebrand themselves,鈥� adds Mr. Helgason, who hosts an influential television current affairs talk show for the state broadcaster.

At the Independence Party鈥檚 headquarters, its new young leader suggests any revival of its fortunes has more to do with its policies for getting Iceland鈥檚 economy back on track. But while admitting that mistakes were made during his party鈥檚 rule, Bjarni Benediktsson also strikes a note of defiance.

鈥淭he global financial crisis was a spark that ignited a barrelful of dry powder,鈥� he says.

鈥淚t came at a very inconvenient time for our banking sector, which could have used the months ahead of October 2008 to sell off and downsize their balance sheets. I am of the opinion that that could have saved them.鈥�

Bank collapses

In the end, all three of Iceland鈥檚 major banks collapsed. Benediktsson鈥檚 analysis, say critics, is symptomatic of a rewriting of history now taking place.
This new narrative veers away from holding Iceland鈥檚 former rulers responsible for a situation in which its greedily overleveraged banks were always destined to hit the rocks 鈥� bringing the country with them - with or without the global crisis.

Indeed, there are cries that the rewriting is happening in a very literal sense at one of Iceland鈥檚 largest newspapers, Morgunbla冒i冒, where quotation marks have begun to appear around mentions of the word "collapse."

Observers detect the influence of a new editor, David Oddson, who just happens to have been Iceland鈥檚 prime minister from 1991-2004, before becoming chairman of the Central Bank between 2005 and 2009.

These days, no other individual in Iceland is more vilified.

Mr. Oddson now gives few, if any interviews, but has been accused of being the guiding force behind the opposition to the Icesave deal.
At the government鈥檚 headquarters, Iceland鈥檚 Minister for Finance, Steingr铆mur J. Sigf煤sson, is under no illusions about the struggle to secure a 鈥榶es鈥� vote in the referendum.

He adds however: 鈥淚 would be hopeful, provided that the debate is balanced, subjective and rational, that we would have a chance to win.鈥�

Paying the Brits, and spending cuts too

It鈥檚 not hard to find those with sympathy for Sigf煤sson, who was a voice of warning in the days of Iceland鈥檚 unlikely role as a global financial power but who now finds himself burdened with selling both the hugely unpopular Icesave deal and forthcoming deep cuts in spending on public services.

At the very least, he can expect others to come under fire at the end of February when the truth commission set up by parliament releases its "Black Report" into the causes of the collapse.

Its contents remain secret for now 鈥� but its chairman has warned Icelanders to brace themselves for 鈥渟ome of the worst news anyone could have to convey to their country."

Whether the report will firmly blame any particular individuals 鈥� politicians or bankers 鈥� is also unknown, although it鈥檚 clear that the general public expect heads to roll at some point.

Most have more faith in a separate criminal investigation into Iceland鈥檚 discredited financial oligarchs, which is being assisted by Eva Jolly, a Norwegian-French politician and magistrate with a track record as a sleaze-buster.

Those expecting this investigation to deliver at least some scalps are unlikely to be disappointed if Mr. Sigf煤sson鈥檚 comments are anything to go by.

鈥淕iven the enormity of this situation and what happened and what is already visible about the behavior of some, one would guess that is a very likely outcome that some people will be severely penalized or put [in] prison,鈥� he says.

If not, could there be a repeat of last year鈥檚 "saucepan revolution?"

鈥淭he whole political system is very unstable and discredited in the eyes of the Icelandic people,鈥� according Mr. Helgason. 鈥淲e don鈥檛 have a tradition of populist parties coming to the fore but there might be an opening if there was a new election.鈥�

He also points to another ominous sign: 鈥淏asically, all the big companies are bankrupt and they are in the hands of the banks, so the wealth of Iceland is being redistributed, including fishing quotas, [which is] the most valuable thing.鈥�

鈥淎lready though there are signs of corruption. That鈥檚 the big question: whether you can restructure society to be a healthy one, or whether there will be a new phase of corruption.鈥�

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