A new mood of proud nationalism is emerging in economically resurgent Iceland after an out-of-control banking system sank the country into financial meltdown exactly five years ago. Riding this wave of confidence is 38-year-old prime minister, Sigmundur Davíd Gunnlaugsson, elected in April on populist promises of mortgage relief for every homeowner.
Gunnlaugsson earned his spurs in years of outspoken campaigning against the foreign creditors who still haunt Iceland, particularly the British and the Dutch governments, which intervened after the collapse of Landsbanki – the bank behind Icesave – on 7 October 2008.
Hundreds of thousands of ordinary British and Dutch savers had previously switched their savings into online Icesave accounts, attracted by market-beating interest rates and promises that: "You can also rest assured that with Icesave you are offered the same level of financial protection as every bank in the UK."
When the crash came, however, Iceland's deposit guarantee proved worthless, forcing the UK and the Netherlands to use their own taxpayer funds to compensate ordinary savers and sparking a poisonous diplomatic row.
It was a spat that, against the odds, Iceland won. While many other politicians in Iceland had urged a policy of appeasing the enraged British and Dutch governments, Gunnlaugsson had insisted they should go hang. "Icelanders, as descendants of the Vikings, are highly individualistic and have difficulty putting up with authorities, let alone oppression," he said in one of his first speeches as prime minister on Iceland's Independence Day in June this year.
"This was clearly demonstrated in the Icesave dispute, in which the people rejected an agreement they considered unfair. This was later upheld by an international court, which showed that the people's sense of justice was a reliable indicator to follow."Having helped win the famous Icesave victory from outside government, Gunnlaugsson has promised to carry that uncompromising approach with him as prime minister, hinting at a new wave of attacks on the interests of foreign creditors to Iceland's three failed banks: Kaupthing, Glitnir and Landsbanki. Between them, these institutions had assets more than nine times the size of Iceland's economic output when they failed in 2008.
Read more: Iceland rises from the ashes of banking collapse | World news | The Guardian
Gunnlaugsson earned his spurs in years of outspoken campaigning against the foreign creditors who still haunt Iceland, particularly the British and the Dutch governments, which intervened after the collapse of Landsbanki – the bank behind Icesave – on 7 October 2008.
Hundreds of thousands of ordinary British and Dutch savers had previously switched their savings into online Icesave accounts, attracted by market-beating interest rates and promises that: "You can also rest assured that with Icesave you are offered the same level of financial protection as every bank in the UK."
When the crash came, however, Iceland's deposit guarantee proved worthless, forcing the UK and the Netherlands to use their own taxpayer funds to compensate ordinary savers and sparking a poisonous diplomatic row.
It was a spat that, against the odds, Iceland won. While many other politicians in Iceland had urged a policy of appeasing the enraged British and Dutch governments, Gunnlaugsson had insisted they should go hang. "Icelanders, as descendants of the Vikings, are highly individualistic and have difficulty putting up with authorities, let alone oppression," he said in one of his first speeches as prime minister on Iceland's Independence Day in June this year.
"This was clearly demonstrated in the Icesave dispute, in which the people rejected an agreement they considered unfair. This was later upheld by an international court, which showed that the people's sense of justice was a reliable indicator to follow."Having helped win the famous Icesave victory from outside government, Gunnlaugsson has promised to carry that uncompromising approach with him as prime minister, hinting at a new wave of attacks on the interests of foreign creditors to Iceland's three failed banks: Kaupthing, Glitnir and Landsbanki. Between them, these institutions had assets more than nine times the size of Iceland's economic output when they failed in 2008.
Read more: Iceland rises from the ashes of banking collapse | World news | The Guardian
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