Meltdown Iceland: Lessons On The World Financial Crisis From A Small Bankrupt Island
Bloomsbury US, 2009
256 pages, $31.00, Hardcover
During the 1990s and 2000s, Iceland had a group—quite small, about 30 altogether—of political and economic elitists; who were influenced by the free market ideology of Milton Friedman, President R. Reagan and Prime Minister Margaret Thatcher. These Icelandic politicians and business entrepreneurs were a new breed of people; abandoning traditional Scandinavian values for avarice and the premise that they could compete and win economically in the world markets.
These elitist Icelanders did everything within their powers to become numbered among the world’s rich and famous. They were frequent flyers to New York or London for dinner or a day’s shopping in the most expensive restaurants and shops of the world. They rented posh hotel rooms or purchased trendy flats in New York, London, Copenhagen and elsewhere.
In contrast to most Icelanders; who were content to live a modest lifestyle by often combining fishing with farming or small businesses; the new breed of Icelanders came up with creative ways and schemes to invest their money through their national banks, which they had privatised. The problem was that they spent more than they earned. Yet, living in denial of the financial crisis of Iceland and the larger world; the new breed of Icelanders kept on taking risks with their investments and racking up even more debts.
The end result of Iceland’s free market, right-wing economics and politics was that their nation went bankrupt. Now Iceland is forced to its knees and has to receive loans with conditions from the International Monetary Fund. Consequently, the burden of debt for every Icelandic household is astronomical—likely; it is estimated, requiring three generations to pay it off. If life for the younger generations becomes too hopeless; many of them may seek better opportunities by immigrating to other countries.
As payment for their debt; some foreign governments who invested in Iceland are making the case for their right to have access to Iceland’s natural resources—primarily water and geothermal energy. Iceland views this as a threat to their national sovereignty. It seems the future of Iceland remains rather uncertain—will they be able to retain their national sovereignty or are they destined to be a satellite province of one or more of the other Scandinavian countries?