Why Church and State Need to Separate in Iceland

For a long time, I've avoided this topic. Partly out of the fact that I grew up in a country with an official separation of church and state, but a great many churches actively involved in politics. One of the supposed upshots of a national church is that it sates the clergy with a sense of power, so they don't try to become activists. However, I think the national church of Iceland resides in a power limbo, exerting political influence and held together by a contradiction and a falsehood - that Icelanders want their taxes to pay for the church, but that they couldn't survive on donations alone.

About 65% of Icelanders are in favor of separation of church and state, according to a poll conducted by the Humanist Society in 2006. 43% said they never go to church. The next highest percentage - 17.4% - go two to three times a year. 15.9%, once a year [PowerPoint report]. The church would drastically shrink if it had to exist on donations alone. And when the bishop of Iceland alone makes nearly a million kronur per month, that's just not going to happen, even if registration has been steadily dropping.

And so the church fights to maintain the lifestyle that it's accustomed to. When the government says it intends to reduce their state revenues by 9%, the church makes a conditional counter-proposal of 5%. This is at a time when social programs across the board have had to take serious hits in the budget, so naturally, this makes people upset. For the church, which is given close to 5 billion ISK a year from the government, to say that they cannot handle a 9% decrease is ridiculous.

But the church contends that it is an independent body in a legal contract with the Icelandic government, and therefore has the right to negotiate terms. They also point out the charity work that's done under the church as another reason why taking a cut would be out of the question. And there's no question that the church does provide charity work.

But the state also provides the same social services the church does, so there's no reason why the funding of the church couldn't just be kept within government social services, which would in turn go directly towards the people who need them without an additional set of salaries subtracting funding from them. There'd still be nothing stopping the church from continuing to provide charities, as well as spiritual guidance (arguably the sole function of a church in a social democratic society).

And then there've been a few recent matters that've come up.

While the issue of gay marriage actually saw some clergy in full favor of the measure, it shouldn't be forgotten that the church still fought the passage of this law. Sure, that's fine. Not every Icelander has to fall in line and obey the word of the parliamentary majority. But it is odd for an organization, while living on tax money and declaring themselves to be a non-political body, to get politically involved in resisting the shaping of legislation. If it weren't for the billions the church gets from the state - if they were supported solely by their congregation - it's doubtful their opinion of gay marriage would carry as much weight.

Still, not a terribly extreme example. What is, however, disturbing is the church position when it comes to sexual assault within its walls. When a former bishop's daughter - with the support of the Feminist Society of Iceland - encouraged the church to come clean about cases of sexual assault involving clergy, church officials became very tight-lipped. Gunnar Rúnar Matthíasson, head of a special committee within the church that oversees incidences of sexual abuse within the congregation, would not disclose just how many instances of sexual abuse between clergy and members of the congregation have been reported, saying only that there has been more than one. Furthermore, the church's own self-made rule that it would keep such matters to itself is in direct violation of Icelandic law.

So basically, this is what we have:

An institution with little relevance to most Icelanders, whose second-greatest claim of importance (social assistance) is already covered by existing government offices, and costs us billions in precious revenue per year, has not only refused to agree to an exceedingly reasonable budget cut, but also flouts the law itself, despite the fact that most Icelanders no longer want this institution to be a part of their government.

Do understand that I am not anti-Christian. I'm not even anti-Lutheran. I understand that to many Icelanders, the church serves an important purpose in their spiritual lives. There's no reason why it couldn't continue to do that if it were cut free from the state. It is, in any event, what most Icelanders appear to want. The matter should be put to public referendum, and then parliamentary vote.

It's not just about the money. It's about the role of both the government and the church. The national church is an obsolete concept. It's time for the nation to decide where we go from here.

The Eruption Giveth, The Eruption Taketh Away

It's hard to believe that barely two months ago a volcanic eruption in Fimmvörðuháls, in south Iceland, seemed like a goose dropping fat golden eggs. That's because the initial eruption was the pretty, Hollywood kind: lots of lava plumes, set against a stark, Nordic background, and relatively safe enough to walk right up to the thing and take photos and videos of it.

It's that last point, in fact, that gave many people here hope. And for good reason: in early April, some 200 tourists a day were heading up to the volcano. March was, in fact, a record-breaking month for tourism in Iceland. We were optimistic that this eruption could be a great boost to our economy.

And that's when Mother Earth decided to troll us.

When the photogenic Fimmvörðuháls was replaced by the decidedly unattractive ash eruption at Eyjafjallajökull, things took a turn for the worse. Apart from making life extremely difficult for people who live in the region, this ash cloud shut down plane traffic across Europe, resulting in multiple flight and hotel cancellations here at home. Matters weren't helped when the president told BBC that the real doom-and-gloom eruption was on its way. He would later add that this isn't likely to happen for decades, but by then, the damage had been done.

And that's basically where we're at now. Summer is almost here, and flights in and out of Iceland can be cancelled at the drop of a hat. Hardworking and dedicated volunteers are in the south, helping to clean up the farms that have had to put up with the heaviest ashfall, and that's heartwarming, certainly. But we're stuck with this ash machine that doesn't seem to be nearing a conclusion anytime soon.

I guess the lesson in all this is: don't expect unpredictable geological phenomenae to rescue your economy. I've also learned that volcanic ash mist apparently kicks my spring allergies into overdrive. Christ I hate this volcano.

Let's Get This Party Started

So, the local news has been more or less updating various minutae about Jón Ásgeir. It really hasn't been dude's week. First, he gets his assets frozen by the people now taking care of Glitnir, as they investigate him for tax fraud. Then, he gets hit with a lawsuit. He's been fairly unflappable so far, though. And with good reason - very little sticks to this guy, and what does hardly leaves a scratch.

If you want some idea of just how powerful this guy was when he was at the top of his game, start here, then go here, and read the relevant articles. Don't be surprised if you get a nosebleed trying to visualize just how far and wide the octopus of this man's grip extends across this country and beyond.

The roughest thing this guy has had to go through up until recently was a June 2008 conviction for breaking accounting laws that compelled him to step down from the chairmanship of the investment company FL Group. In his place, his wife Ingibjörg Stefanía Pálmadóttir was elected. The company changed its name to Stodir, and then bought a 39% stake in Baugur Group - which is owned by Jón Ásgeir.

Well, a lot has happened since 2008, of course. With the grip tightening on the Kaupthing guys, and the general spirit of vengence in the air, he's probably starting to feel a little nervous. Or maybe he isn't. Just look at those jazz hands. Does this look like a man who's easily rattled?

(Photo credit: Chris Casaburi)

Holy Wow

As most of you know by now, former Kaupthing chairman of the board Sigurður Einarsson is now wanted by Interpol. Yes, that's a big story. I honestly can't remember an Icelander who's ever been wanted by Interpol. Then again, I'm American by birth, and our concept of Interpol is this shadowy secret police that hunts down international jewel thieves with underground lairs. Maybe this sort of thing is more common than I know.

However, what I found particularly stunning is that the newspaper Fréttablaðið not only got an interview with him, but just how clueless and arrogant his responses were.

For example: his take on the special prosecutor seeking out the bankers and investors who played Vegas with other people's money and ruined the nation is "I am absolutely flabbergast at recent events. It really surprises me that men are being arrested upon their arrival in Iceland."

Of course it surprises him. White collar criminals don't get arrested; they get escorted. They don't get put in prison; they're slapped with a flight ban. They can still roll up to court in their Land Rovers, and strut into the building in their finest clothes, sipping their bottled water. Real criminals - you know, people who steal cash the old fashioned way - they're the ones who get cuffs and jailcells, who get led into court with their jackets over their heads. In other words, crooks steal thousands; businessmen steal billions.

But my favorite quote from this guy would have to be this:

"I find these arrests and jailings absolutely unnecessary, and will not at least take any part in this drama, which I believe is being put on to soothe the anger of the nation."

You see? He's the victim here, people. The decent, hard-working former bank managers of Kaupthing are being scapegoated to placate us angry peasants. It's all just one big circus to distract us from the real culprits behind the economic collapse: plain ol' bad luck! Or the Rosicrucians. I don't think anyone's mentioned them yet, which I think is very suspicious.

William Black for Central Bank Chairman!

One of the things that can be frustrating about interviewing Icelandic politicians or other officials is that they can, and often do, guard their words very closely. Can't say I necessarily blame them. It's a small country, and you never know who you might anger, or what door you might permanently shut, by saying the wrong thing. You ask a question, and you can see them trying to carefully construct their response. Of course that's a boon in many ways. You want someone to be sure that they mean what they say, and to speak with certainty. On the other hand, this also leads to requests to pre-read an interview, where they then attempt to redact this or that. And of course, there's my own selfish motivation of wanting, just once, for someone to be outspoken, speak plainly, and say what's exactly on their minds. It happens, don't get me wrong, but only once in a blue moon.

That's why it was a pleasure to interview William Black. In case you don't know the guy's background, he's essentially been an economic pit bull in the US for many years now. When everyone else was tossing around the "too big to fail" meme, and Bernie Madoff's Ponzi scheme hedge fund overshadowed the everyday wrongdoings elsewhere in the country, Black was one of few people willing to call a spade a spade and say that the banks involved in the economic collapse were themselves a Ponzi scheme.

This guy had absolutely no qualms with telling me that accountability for Iceland's economic collapse begins with the political parties that created the environment for it. As you can see in the interview, he's sharp, insightful and candid. He has no problems speaking his mind, and has both the education and the experience to back it up.

I believe - and I don't think I'm being hyperbolic here - that William Black should be awarded Icelandic citizenship and immediately hired as chairman of the Central Bank. Yes, he's already pretty busy with that teaching gig, and no, he doesn't speak nor understand Icelandic. But these are trifling details that could be worked around.

I'm not asking for the moon here. And who would possibly object? Surely parliament can make it happen.

Cat Herding

As a leftist myself (and by that I mean, I am a registered member of the Leftist-Green Party), it pains me to say this, but I've noticed that the right wing seems to have an easier time sticking together and being in general agreement than the left wing does. Leftists argue and splinter off; righties grumble in mild disagreement, but stick together. Why this is would be a subject for a whole other article - what makes me think of this today is the outcome of yesterday's cabinet meeting.

In a nutshell, the government needs to make more cuts. Now, being leftist, this government doesn't possess the sort of merciless bloodlust for slashing social programs that comes so easily to the right. And so in order to avoid that as much as possible, the Social Democrats have proposed combining a few existing ministries: the ministries of social affairs and health would become one, and the ministries of fishing, agriculture and industry would become the tentatively-titled-but-catchy-sounding Ministry of Employment. This would take the number of ministries down from 12 to 9, which would mean it's reducing the size of the government, and thus, reducing spending. 9 is less than 12, after all, right?

Well, not everyone's on board with this idea, even within the ruling coalition itself. Eyjan.is is reporting that the Leftist-Greens are against the idea. The reasoning appears to be due to primarily to ego. Leftist-Green MP Ögmundur Jónasson used to be Minister of Health, but resigned from that position due to disagreements over Icesave. He's got a lot of supporters who'd like to see him back as some sort of minister. At the same time, current Minister of Fishing and Agriculture Jón Bjarnason has his share of fans who want to see him stay on in his capacity. Among them is Leftist-Green MP Ásmundur Einar Daðason, who has been dead set against the Ministry of Employment idea. Rather than combine ministries together, they would rather do away with the only two non-party-affilliated ministers - Minister of Business Gylfi Magnússon and Minister of Justice Ragna Árnadóttir - and replace them with politicians.

Now, as you can imagine, this caused a firestorm in the Icelandic blog world, the general sentiment being that the Leftist-Greens are willing to stand in the way of reducing the budget in order to get their own people into positions of power, they are all self-serving communists, they probably hate rainbows and puppies, and so on.*

The whole argument between the two parties is pretty much part and parcel of their relationship with each other. The Social Dems and the Leftist-Greens sprang forth around the same time, and are derived from similar ideologies. They're pretty much like siblings. They get along, sure, but occassionally they have little dramatic hissy-fits - such as the one sparked when Prime Minister Jóhanna Sigurðardóttir likened getting the Leftist-Greens to agree with each other to herding cats - going back and forth with snippy, passive-aggressive verbal barbs until they get bored with it and make up.

Every time they fight, conservatives chortle and chin-stroke, speculating that this time for sure the government is really on shakey ground. Inevitably, someone will pose the question to the parties, "Oh wow guys I can't believe you're fighting - are you breaking up???", and the response is always the same: "It's perfectly natural for two separate political parties to disagree from time to time. This government is sticking together." It'll stick together this time, too. If for no other reason than to keep conservatives out of power.

It's not like they argue all the time or anything. Just on minor, trifling issues such as Icesave, allowing a private military contractor to set up shop here, and how to organize the government. Other than that they're like BFFs.

*On the other hand, would combining ministries really reduce the budget? Assuming a best case scenario, where the upper-management of the combined ministries take a big ol' cut, and then have to oversee double the staff, what sort of workload would the new management be looking at? Delays in ministerial procedures themselves cost money. So does hiring assistants to take care of the backlog. Nine is less than twelve, sure. But is the answer to budget problems within the government really to give the already-overburdened management even more stuff to manage? I don't get invited to cabinet meetings, so I really have no idea just how concrete or well-thought-out these proposals are.

FIRST

Most of what I do for the Grapevine is translate domestic news into English. And because it was the economic collapse in fall 2008 that got me posting news again, it's made a red thread of itself through most of the news I post. So naturally, when I heard that Former Kaupthing manager Hreiðar Már Sigurðsson, along with former Kaupthing bank manager in Luxembourg and current director of Banque Havilland, Magnús Guðmundsson, had been arrested for financial wrongdoing in light of a report from the Special Investigative Commission (SIC), this caused a certain sense of relief. When I'd read Vísir disclosing where the men were being held after their arrest, the police station by Hlemmur, I imagined for a moment a mob descending on the place.

However, at work the following day most everyone was decidedly cautious about celebrating just yet. This is entirely new territory for Iceland, after all. White collar crime is notoriously underprosecuted. All the same, when Reykjavík District Court denied the men immediate release, and instead sent them to custody at the prison Litla-Hraun - where they'll be in solitary - for twelve and seven days respectively, This gave me a bit of hope. The judicial system, it seems, is willing to act.

But even if there aren't any convictions - and I'd be surprised if there weren't - to go from collapse, change of government, investigation and then arrests within about 18 months is quite a feat.

My biggest worry right now is that special prosecutor Ólafur Hauksson will stay focused on the banks alone. As professor of Economics and Law William Black told me during his visit to Iceland, "the Icelandic government at the time [leading up to the bank collapse] was an almost literal cheerleader for the industry. ... That included the prime minister [Geir H. Haarde], that included the Central Bank chairman [Davíð Oddsson], and that included the regulatory agency."

It's not illegal to be a libertarian, of course. Oddsson and Haarde are welcome to believe in the invisible hand. But what Black points out is that the government did not exert the kind of vigorous supervision that is necessary for a healthy economy: "You have to be more objective. For financial institutions to work well, you need trust, and the paradox is, you need somebody who is skeptical. And there was nobody. Nobody in the senior ranks that was skeptical. ... the ruling political parties at that time, if you had to start with accountability, that's where you would start."

Negligence or collusion, there's enough to bring charges on both Haarde and Oddsson. Whether they'd stick is another matter. In the SIC report, Oddsson depicts himself as being constantly lied to by bank managers. He related a story of yelling in the face of an Financial Supervisory official when presented with Glitnir's numbers shortly before the government took it over. He paints himself to be a decent man surrounded by liars. Even the front page of the newspaper he edits, Morgunblaðið, saw fit to run "The Banks Are Responsible" as their banner headline the day after the report was released, while Oddsson himself was recusing himself from his chair for the week. Making charges stick on Oddsson will necessitate proving that he either purposefully turned a blind eye or was in cahoots.

Haarde, for his part, comes out as more clueless than anything else and, unsurprisingly, terrified of Davíð Oddsson. He wouldn't be alone. Oddsson has a strong grip on the old guard of the conservatives especially. But fear carries with it resentment, of course, and some of his own party members have turned a cold shoulder to him.

Even the President has been brought into this. The SIC report basically said the guy was the PR man for the "outvasion vikings", and used his office to gain favors for some of them. The President's denied any wrongdoing, and said the report has numerous inaccuracies regarding him. It's moot either way, because no one is arresting the President of Iceland. It's just not gonna happen.

Right now, there are two men in solitary confinement in prison, essentially charged with helping to ruin Iceland. We're off to a good start. But none of it will mean anything until the apparatus of government itself is changed.

The banks were allowed to grow ten times the size of the GDP not just because the government was whistling as it drove along, the bolts flying off the wheels. There's never been a real financial supervisory force in place. Privatizing the banks - which was finalized in 2003 - was done on the belief that it was more freedom the banks needed, that this would stimulate growth. The pendulum had swung from one side, to straight through the opposite wall.

Until an active, powerful and politically neutral institution that can and does monitor and calibrate the economy is established, nothing in this country is going to change.