Click here to see an extended version of the interview.
There’s still a lot of anger in Iceland about the financial collapse. What’s happening now?
Feelings are mixed. Icelanders are both angry and full of sorrow and anxiety. They feel betrayed by the state, by the banks and by our allies. But the anger is also directed inwards – why did Icelanders let this happen?
This month, the parliamentary inquiry into the crash will be published. A judicial process into possible misconduct by financial institutions and other players is also ongoing. Eventually those suspected of misdoings will be prosecuted. The government is pressing on to ensure the collapse will not be repeated.
How is your relationship with Gordon Brown, given the disagreements over Icesave?
I have explained the present situation regarding the Icesave bill to him. The president of Iceland has deferred the bill to a national referendum – that is his constitutional right. Gordon Brown was of course disappointed by this delay, but declared he would continue to co-operate with the Icelandic government.
Many Icelanders feel that last year Prime Minister Brown went beyond what could be justified. The use of anti-terror legislation against a peaceful neighbour and Nato ally is unprecedented. I am convinced that the UK government would not have used this legislation against a larger European country. All this needs to be discussed while we repair relations.
What will the result of the referendum be?
I’m convinced Icelanders will reach the right decision. On that basis, we will keep on with our recovery plan, hopefully in co-operation with the international community.
Is the request that Iceland repay its bankers’ debts reasonable?
Almost every Icelander finds it unreasonable that Icelandic taxpayers should have to pay thousands of pounds each, for a failed private bank, because of mistakes the taxpayers had nothing to do with. But someone has to pay. The question is really how this burden should be divided between the parties involved.
If Iceland does not repay the debts, is there a risk it will become a pariah state?
Iceland remains committed to honouring its obligations. However, the Icesave issue has been deeply contested in Iceland, given the enormous economic burden involved. But Iceland will recover. We stay in close contact with the governments of the UK and the Netherlands, Nordic and other partner countries, and with the EU and the IMF.
How will your economy change, post-crash?
In future, the Icelandic economy will be based on sustainable use of its fishing stocks and energy resources, and the ingenuity and strength of its well-educated, vibrant, young population. We are restructuring a more stable economy that is returning to its roots as a Nordic welfare state. I put great faith in the EU accession negotiations we hope to start early this year.
What benefits would EU membership bring?
Polls indicate that public opinion is divided on EU membership, but it would build confidence and give a sense of direction. We would gain a voice within EU institutions, prices of certain consumer goods should fall, and the EU’s regional policy would be beneficial to the remote regions of Iceland. Membership would allow for adoption of the euro, which would reduce the cost we pay to maintain the world’s smallest independent currency.
Your first year as prime minister has been tough. How have you found it?
I have always worked hard, and seeing so many Icelanders make tremendous efforts to cope with difficult tasks and decisions inspires me.
Your government is 50 per cent female. Is equality important to your vision for Iceland?
Definitely! Egalitarian policies are the best way to unite and empower people, and are also a necessary counterweight to the sometimes detrimental influence of market forces. A society that does not use the intellectual power of its female population fully is not a wise society. Most women are not as tainted by mistakes in the conduct of the economy as the male population, and now they deserve an opportunity.
You called for Davíð Oddsson, the former chair of Iceland’s Central Bank, to stand down. He now edits the Morgunblaðið newspaper. How do you feel about that?
It has become a quite common view that he has turned Morgunblaðið into a campaign organ for his own views. His assignment is a decision the owners of Morgunblaðið have to stand by, and is not for me to comment on.
Is there a plan?
A plan provides focus, but is not an end in itself.
What would you like to forget?
I would like to remember all and be able to forgive everything – in due course!
Are we all doomed?
Our time is limited, but the spirit is free.
Click here to see an extended version of the interview.
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