One letter and about six months. And a whole lot more.

“What’s the difference between Ireland and Iceland?

One letter and about six months”

Thus went the joke early in 2008, after Iceland’s economy went to the wall. Sure enough, the joke was prophetic, and Ireland followed suit a few months later. Prophetic is probably too strong a word, as sensible economists had been warning about Ireland’s reckless policies for the previous ten years, but had been duly ignored by the powers that be. The differences between the two countries, aside from the orthography, began in the reaction to the respective crashes.

Iceland moved to protect its citizens, and allowed the banks to fail. Measures introduced included debt forgiveness programmes, nationalisation of the banks and abandonment of their foreign operations, inflation controls and the devaluation of the currency.

Ireland opted to save the banks, and leverage the debt onto the taxpayer, so that every citizen, from infants to the elderly, was now in debt to the IMF/ECB to the tune of $43k [current figures]. Bankers still received their pensions and bonuses, and central figures to the crisis like Sean Fitzpatrick were acquitted (not least with some help from shredded documents). Now, inequality in the country is at pre-independence levels, as we are going back to the times of absentee landlords, along with spiraling rents and property prices and record levels of homelessness. And remember, our government accepted the Troika’s austerity measures unquestionably, with the full backing of the opposition. This same ‘opposition’ then appealed the decision of the EU General Court which had ruled that Apple owe the EU €13 billion, to be collected by the Irish Revenue. It shows once again whose side our government are on. Let the Irish population suffer, but defend corporate interests. Why didn’t they stand up for us in the European Commission? Even some cursory negotiation would have lessened the debt loaded onto us in the post-crash world.

Granted, one measure that Iceland were able to implement that we weren’t was the devaluation of its currency. Economics 101; devalue currency to stimulate growth. With us being locked into the Euro, this option was not available to us. I have never agreed with the Euro, and struggle to see the advantage of it. Is having the minor convenience of not having to exchange currency abroad worth losing the ability to control monetary policy?

But even within the EU, there is another example of how the austerity policies touted as necessary here, in the UK, and elsewhere were just the policies promoted by those who want to maintain inequality. Portugal, instead, confounded the plutocrats, by shifting to socially-focused policies and have been reaping the rewards since. It is currently being watched intently by economists the world over, as its unconventional approach has shown exceptional results. Imagine what we could achieve if we had a government not driven by lining their pockets and those of their elite associates? While convincing us that this is the only way it can be? Isn’t capitalism the extraordinary belief that the nastiest men, for the nastiest of reasons, will somehow work for the benefit of us all*?

But back to my initial comparison. Not everything is rosy in Iceland of course. The cost of living is extremely high, partially due to the boom in tourism that has been driving property prices through the roof. A local last weekend wearily informed me that house prices in Reykjavik had reached $750k, adding “This is not London, or Berlin, or Paris. This is a village.” Still, their standard of living is much higher than here, and unemployment extremely low. Homelessness is sadly an issue, but is nowhere near the levels in Ireland.

So, there are quite a few differences between Ireland and Iceland. As well as economic and policy considerations, Iceland is of course a very green country, with its entire national electricity grid run on geothermal power. Again, not an option to us, but we could certainly do more with wind and wave power. What also stuck me was how clean the country was, and how conscious it is in relation to waste and recycling. While there was a small amount of waste evident in and close to the capital, most of the population are proud of their raw and pristine environment, and aim to keep it that way. The more remote areas were spotless. Hiking in the breathtaking Thórsmörk area I was delighted to see how well maintained it was. Obviously everyone else in the area treated the environment with respect, and I didn’t see as much as a single discarded wrapper or cigarette butt in three days hiking there. If you want a depressing comparison, head to the Sally Gap and see fridges, couches, microwaves and other rubbish tossed from cars by the side of the road. Disgusting.

Now, I was only in Iceland for a short visit. I’m sure if I lived there, I would be able to dig beneath the surface more and find plenty to criticise and complain about. But from first impressions, the country and the attitude of its people appealed to me. Maybe some day I will have the chance to learn more. In the meantime, I’ll continue to sift through the detritus I see in front of me here every day.


*paraphrase attributed to the great John Maynard Keynes, though unverified. I think it is a pretty succinct description however.

3 thoughts on “One letter and about six months. And a whole lot more.

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