The Icelandic alternative

By Bernadette Meaden
September 20, 2012

Recently Steingrímur Sigfússon, an Icelandic government Minister, talked about Iceland’s response to the financial crash of 2008.

"The single outstanding factor is our commitment to preserve the Icelandic welfare system through this, and try to distribute the burden of the crisis as socially justly as possible.

"The economy is now picking nicely up, we are experiencing growth for the second year in a row, a relatively handsome three per cent plus, because we managed to keep everyone active and include the lower-income groups as active consumers and participants in the economy.

"In return of course, those with wealth have to contribute more."

Here in the UK our government has done the opposite, and unsurprisingly driven us further into recession. Instead of now realising it’s not working and changing course, politicians like Liam Fox are calling for tax cuts, to be funded by more draconian welfare cuts.

In Iceland, responsibility for the financial crisis was placed firmly at the feet of those who caused it. Bankers, civil servants and government ministers have been treated as suspected criminals, investigated, and when found guilty, jailed.

Banks that failed were nationalised, and household debts deemed unmanageable were written off.

Here in the UK there has been a lot of huffing and puffing, but the bankers have been let off the hook. Unless you count stripping Fred Goodwin of his knighthood. That’s about as harsh as it gets for a banker in the UK.

Instead, our government has put most of the blame for our problems on the poorest and weakest members of society, punishing them accordingly. The ‘undeserving poor’, the scroungers, the sick and disabled people who Atos say could work but won’t, the Remploy workers who, in Iain Duncan Smith’s view, ‘sit around drinking coffee all day’. The less power you have to fight back, it seems, the more blame this government will heap upon you, the more it will punish you.

But what about those economic arbiters the Ratings Agencies, which George Osborne has always been so eager to placate? When the Chancellor embarked on his path of austerity he cited the approval of the Ratings Agencies as vital to our recovery, and impossible to achieve if we didn’t follow the path of austerity. In February Bloomberg reported:

"Fitch Ratings last week raised Iceland to investment grade, with a stable outlook, and said the island’s “unorthodox crisis policy response has succeeded.”

Next time a politician says that the destructive course we are now on is the only course, that there is no alternative, think of Iceland, and its apparently bright future.

On October 20th the TUC is organising a march ‘For a Future That Works’. There is also talk of a possible General Strike. This has been met with outrage from predictable quarters, alleging that it would be the height of irresponsibility. But if the country is on a course that can only lead to economic decline, social injustice and ever-increasing human misery, a General Strike to force a change of course could be the most responsible act of all.


© Bernadette Meaden has written about religious, political and social issues for some years, and is strongly influenced by Christian Socialism, liberation theology and the Catholic Worker movement. She is a regular contributor to Ekklesia.

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