Iceland: A Democratic State? This Article Had to Happen

Translation: Victoria Bakshina

Tourists often want to tell me what a great political utopia we live in. However, what we could once have called a decent situation here in Iceland keeps getting worse every year, and although many do not care to admit it, one of the main reasons for this worsening situation is that people continue to vote for the Independence Party. Many of you who are reading this article are probably at a very young age and/or of foreign origin. Therefore, I think it’s important to recall a few things that might have passed you by in the last 15 years regarding the politics on our little island - especially regarding our Minister of Finance and chairman of the Independence Party, Bjarni Benediktsson, and what he’s been up to.

To begin with, it’s vital to keep in mind that here in Iceland, monopolizing natural resources which could belong to and benefit the public - such as our fish - is perfectly legal. Quotas for those resources have been assigned to a few investors, who’ve since passed it onto their offspring. This means that a vast amount of money that could (and arguably, should) belong to the nation is currently in the hands of a few families, and will continue to be until the laws on Iceland’s quota system are amended (I am of course talking about the families that have a combined share of more than 85% in Samherji). Unfortunately, it’s pretty common for countries to have a few powerful families which wield a disproportionate amount of political power and influence. One such family in Iceland is undoubtedly the Engey family, which is a true “old money” family and has been for over 100 years. 

One person from the Engey family is someone we should all know, as he tends to be linked to scandal after scandal. I am of course talking about Bjarni Ben! As I’m writing this article, Bjarni is working hard to suppress discussion regarding Auditor General Sigurður Þórðarson’s report on the Lindarhvoll case; a few years after the economic collapse, Bjarni founded the company Lindarhvoll, which took over state property and subsequently sold it to private parties for cheap. The speaker of Alþingi refused to publish the Auditor General's report on the matter, claiming that “there was no reason to look into it”. There was another report made in November of last year regarding the sale of Íslandsbanki - which Bjarni was not interested in discussing either - the report wasn’t brought to light until six months later. The sale of the bank was certainly interesting, and according to a Gallup survey, only a quarter of the people in the country supported its privatization... most of whom were Independence party supporters or members. 

Another factor regarding the sale of Íslandsbanki must be considered. When the sale occurred, it was stated that only institutional investors would be allowed to buy shares in the bank, but after the sale it became evident that this was not the case. On the contrary, those who ended up buying shares were financial sector insiders… and Bjarni’s father. This sparked a fair amount of outrage from the public, but Bjarni claimed that he simply hadn’t known of his father’s involvement and denied having been privy to his father’s investment. However, we must ask ourselves whether someone who was involved in the dubious business ventures before the financial crisis should ever have been considered fit to oversee the privatization of Íslandsbanki.

What is perhaps most scandalous about this matter, however, is that most of these investors immediately resold their shares, making up to double the amount of the money they had initially spent. Does all of this seem a little shocking? Just you wait. This is far from the first time Bjarni has been in the limelight because of his involvement in the sale of Íslandsbanki. 

Back in 2008, Íslandsbanki was called “Glitnir”. That year, the Icelandic króna’s value had fallen enormously, to which the government responded by announcing at the end of September that it intended to buy a 75% stake in the bank. Shortly after - in early October - the bank ended up collapsing, which resulted in a huge loss of money for many of Iceland’s citizens and the financial crisis many of us remember. However, what we didn’t know until a few years ago is that some documents on the matter appear to have been leaked, and Bjarni and his uncle, Einar Sveinsson, might have known that the bank would collapse after the government announced its intentions to buy significant shares in the bank. The media company Heimildin has brought to light that in 2008 between September 29th and October 6th, both Bjarni and Einar sold shares to a fund within the bank called “Fund 9” - Bjarni sold stakes for 50,000,000 ISK and Einar for 1,200,000,000 ISK. After this surfaced, Bjarni stated in an interview with The Guardian that “any sensible investor would have been considering selling”, yet many Icelandic investors lost a lot of money. This is an example of how Bjarni and a select few manage to dodge the topic of their involvement in insider information cases every single time; they rely on the art of rhetoric. 

Things are not quite as they seem in Icelandic politics. 

“Bjarni, the sale of Íslandsbanki does not seem to have complied with the law governing such a sale!”

“Well, I don't think the law should apply in this situation!”

This is how Bjarni responded during Alþingi’s open meeting of the Constitutional and Supervisory committee in May of last year. After the report on the sale of Íslandsbanki was finally released in November last year, Bjarni appeared in an interview with Kastljós, where the interviewer mentioned that Bjarni had refused to be interviewed alongside a political opponent, to which he replied that this was simply not true, although the interviewer repeatedly stated that Bjarni had requested to appear alone.

At this point I’d like to ask you: is this the right leadership for our nation? Many of us harbor little to no trust toward our politicians, and that’s been the case for a long time, but for some reason we keep electing the same people - even when our government collapsed twice in the span of one year (and yes, our leadership still includes the same people). The decisions made by these parties directly affect students and the university society, yet I feel like many students prefer not to delve into the reality of our political landscape. When I see ministers in other countries resign after their misconduct is brought to light, e.g. government officials in the U.K. in recent years, I can’t help but think that Bjarni Ben will probably never resign despite substantial pressure from the public. And people will probably continue to vote for the Independence Party. And then we’ll face another scandal.

I don’t know about you, but I’m not thrilled about the idea of someone so closely connected to several government scandals remaining in one of the most powerful positions in our government.

Sources

 Ingi Freyr Vilhjálmsson. “Seldi í Sjóði 9 sama dag og neyðarlögin voru sett”. Heimildin, October 6th, 2017.

 Jakob Bjarnar. “Ríkisendurskoðandi sér ekkert athugavert við starfsemi Lindarhvols ehf”. Vísir, May 18th, 2020.

 Jon Henley. “Iceland PM sold bank assets hours before financial crash, leaks show”. The Guardian, October 6th, 2017.

 Jón Trausti Reynisson. “Sá sem átti aldrei að sjá um að selja Íslandsbanka”. Heimildin, April 8th, 2022.

 Þórður Snær Júlíusson. “Eigendur Samherja færa eignarhaldið til barna sinna”. Kjarninn, May 15th, 2020.