'Economic Collapse' Tag Archive

Jan 30 2009

The Icelandic Government has Collapsed… and then what? – A Letter from Icelandic Anarchists


A letter from Icelandic anarchists who have taken part in the revolt against the recently collapsed government. The article originally appeared on Aftaka.org, an Icelandic anarchist website.

The Icelandic Government has collapsed and some people talk about a revolution. In a way it is true. Ordinary people overthrew this neoliberal government by writing articles, holding speeches, noise demonstrations, bonfires, car horns, direct action, civil disobedience and minor sabotage. A nation that before had hardly put up any resistance to abuse of power for a long time, finally stood up and said: “No thanks! No more shit!”

But what will follow? Have we reached the ultimate goal? Is the minority government of the Left Greens (Vinstri Grænir) and the Social Democratic Alliance (Samfylkingin) enough? Are we just going to settle for new elections this spring?

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Jan 08 2009

Party Political Live TV Show to be Sponsored by Rio Tinto-Alcan Stormed by Angry Protestors


From Aftaka.org – On December 31st, we witnessed a unique action here in Iceland. Obviously it was not the all time climax in the history of Icelandic resistance compared e.g. to the 1949 riot, when Iceland joined NATO and people put up heavy resistance in Reykjavík. But first and all, it was a symbol for the waking up which is taking place in the Icelandic society – society that before was completely apathetic. And the action worked out perfectly in that we managed to do what we wanted, to disrupt and stop the TV transmission.

Hundreds of people had gathered by the government’s office, where flares were lit and people marched to Austurvöllur, the square in front of the parliament. The group then gathered by a statue of Jón Sigurðsson, Iceland’s so called independence hero. In few minutes a live TV program called Kryddsílsd, would take place. The program is an annual show where the ministers of the government and the heads of the political parties come together to drink themselves tipsy and talk about the political year that is about to end. Read More

Dec 23 2008
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Iceland ‘Like Chernobyl’ as Meltdown Shows Anger Can Boil Over


By Ben Holland, Bloomberg

It was the week before Christmas in Reykjavik, and all through the town Eva Hauksdottir led a band of 60 whistle-blowing, pan-banging, shouting demonstrators. “Pay your own debts,” they yelled as they visited one bank office after another in Iceland’s capital. “Don’t make the children pay.”
When she isn’t leading one of the almost daily acts of protest in this land devastated by the global financial meltdown, Hauksdottir sells good luck charms made from the claws of ptarmigans, a local bird, and voodoo dolls in the form of bankers. She says she expects to lose her home, worth less than when she bought it two years ago, after the amount she owes jumped more than 20 percent. Read More

Nov 11 2008

Búðarháls Dam and RT-Alcan Production Increase Delayed


Landsvirkjun, Iceland’s national energy company, has announced that the tender offer of the dam Búðarhálsvirkjun will be delayed because of the current economical situation. This means that the planned expansion of Rio Tinto Alcan’s aluminium smelter in Straumsvík will also be delayed. Construction of Búðarhálsvirkjun, which was stopped a number of years ago, will dam the Tungnaá River, close to the lake Langisjór.

The construction of Búðarhálsvirkjun is expected to be around 25 billion ISK and the 85 MW dam is supposed to power R.T. Alcan’s increased production in Straumsvík, Hafnarfjörður. R.T. Alcan hopes to increase its production by 40 thousand tons per year without enlarging the smelter. But the company also hopes to enlarge the smelter further, though the people of Hafnarfjörður voted against it in a 2007 referendum, or to construct a new smelter i Thorlakshofn. The dam is also meant to create power for Verne Holdin’s data center to be built in Reykjanesbær. Read More

Nov 03 2008
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Iceland Sinks


Haukur Már Helgason, Il Manifesto (Italian daily) – Last April, the government published a report about “Iceland’s image”, written by a committee of leading business people in Iceland. The report summarizes Iceland’s history thus: “For a long time, the nation lived through hardships, but once it achieved freedom and independence it took a leap from being a developing country to becoming one of the richest nations in the world, in less than a century.”

This October, the only growing business sector in Iceland is body guards. It’s booming. For the first time in Iceland’s history, the heads of state, politicians and stock exchange „entrepreneurs“ are surrounded by professional muscle-men. After six to ten years of private ownership, and constant staggering growth, all three major banks in Iceland collapsed in a week, unable to pay their debts. Economically they had become 10 times bigger than Iceland itself. The state, led by the Central bank re-nationalized all three of them, one by one. Read More

Oct 29 2008

Björk: After Financial Meltdown, Now it’s Smeltdown


The men who made Iceland go cap in hand to the IMF are now bent on ruining its landscape

Björk, The Times – After touring for 18 months I was excited to return home a few weeks ago to good, solid Iceland and enjoy a little bit of stability. I had done a concert there earlier this year to raise awareness about local environmental issues and 10 per cent of the nation came to it; but I still felt it wasn’t enough.
So when I returned I decided to contact people all over the island who had attempted to start new companies and bring in new greener ways of working but had not succeeded. For a long time Iceland’s main income was fishing, but when that become uneconomic people started looking for other ways to earn a living. The ruling conservatives thought that harnessing Iceland’s natural energy and selling it to huge companies such as Alcoa and Rio Tinto would solve the problem.
Now we have three aluminium smelters, which are the biggest in Europe; and in the space of the next three years they want to build two more. The smelters would need energy from a handful of new geothermal power plants and the building of dams that would damage pristine wilderness, hot springs and lava fields. To take this much energy from geothermal fields is not sustainable. Read More

Oct 26 2008
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More Power Plants May Cause More Economic Instability


Jaap Krater, Morgunblaðið, 26-10-2008

In times of economic crisis, it is tempting to embrace new megaprojects such as new power plants and aluminium smelters. But will this realistically improve Iceland’s economic prospects?

Prime minister Geir Haarde recently explained on Stöd 2’s chat show Mannamál that one of the main reasons for the fall of the Krona, was due to the execution of heavy industry projects: the construction of Kárahnjúkar and Alcoa’s smelter in Reyðarfjörður. If more large projects are executed, what will the cost be for the Icelandic taxpayer?

Haarde’s comments were not surprising. Before construction of Kárahnjúkar many economists predicted the negative impact on inflation, foreign debt and the exchange rate of the ISK.

Of course there is some economic benefit from new smelters, but “it is probably outweighed by the developments’ indirect impact on demand, inflation, interest rates and the ISK exchange rate,” stated a report by Glitnir in 2006 on the impact of aluminium expansion in Iceland. The report expected an increase in inflation and a depreciation of the ISK.

“Kárahnjúkar will never make a profit, and the Icelandic taxpayer may well end up subsidising Alcoa,” said the eminent economist Thorsteinn Siglaugsson after publishing another report on the profitability of the Alcoa dam in East Iceland before construction commenced. Read More

Oct 26 2008

From One Mess to Another


Andri Snær Magnason, Fréttablaðið – In these turbulent times interested parties use the opportunity to offer us “solutions” and relief. This time around it involves “alleviating all restrictions” and putting public energy companies up as 300 – 400 milliard collateral for two to three new aluminium plants. This is what is on the drawing board when the total debt of OR and LV (the central public energy institutions) are already at a dizzying 550 milliards – mostly because of Alcoa and Norðurál (Century Aluminum). This is why the banks always preached large-scale industry policies – more debt – more joy. It’s down to the price of aluminium to repay these loans, but aluminium prices are plummeting and a level of overproduction has already been reached. The nation believes that the magic term EXPORT EARNINGS is money that will end up in the nation’s pocket. News of export earnings and foreign currency receipts have time and again been directly false and treacherous. A bar chart published in the Morgunblaðið newspaper the 11th of October depicts the aluminium industry as more important than the fishing industry and considerably larger than the tourism industry. But the presentation is exactly as the INTERESTED PARTIES would like to have it portrayed in the media. When Alcoa Fjarðaál claims to export for 70 milliards a year, most Icelanders believe that this is currency that we can use. Read More

Oct 23 2008

Century Stops Investment in Helguvik Smelter


Century Aluminum announced in a statement it is reconsidering the planned smelter in Helguvík. It said it has stopped making any new capital commitments due to the global financial crisis.

“In the current environment, we have ceased making any new capital commitments and are reducing project spending. We believe the potential exists for a prudent way forward over time, but will soberly evaluate the feasibility of all elements of the project during the near term,” (1) said Logan Kruger, Century’s CEO.

While Century Aluminum’s revenue for the third quarter of 2008 rose due to an increase in aluminium shipments (2), prospects were deemed less rosy. Merrill Lynch downgraded Century Aluminum’s investment rating to ‘underperform’. It said aluminium pricing is weak, inventories of the metal are high and there are little catalysts to drive the price up.

“Some might think this is bad news for Iceland and that a new smelter could help with the economic crisis. But when we looked at what happened with Alcoa Fjardaal and Karahnjukar, a cancellation of Helguvik may be a blessing in disguise,” says Saving Iceland’s Jaap Krater. Read More

Oct 19 2008
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Economic Crisis In Iceland – An Overview


For the last two weeks Iceland has been facing economic crisis, the worst since 1914. The Icelandic Króna (ISK) has fallen lower than ever and the whole economy seems to be close to a total collapse. How did this start and how does it look now?

The collapse of Iceland’s bank system

The morning of September 29th was the beginning of the crisis for the Icelandic public, when it was announced that the State and Glitnir, one of the tree big banks of Iceland, had come to an agreement that the State would buy 75% share in the bank. Signs of economic crisis have been visible for quite a long time in Iceland; economics and leftists have been warning the Government, but until September 29th, the Government and the Banks have repeatedly ignored these warnings and stated that everything is fine. According to Iceland Review “the state is not planning to be a majority owner in Glitnir long-term; the purpose with these actions is to secure economic stability.” At this time Glitnir had lost c.a. 85% of its share value when the stock market closed Friday September 26th.

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