How Iceland Views the Financial Turmoil

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This story is based on a radio interview. Listen to the full interview.

Audio Transcript:

Marco Werman: The idea of a referendum in the middle of a financial crisis has a recent precedent in Europe. In the aftermath of the 2008 collapse of Iceland's banking system, the country held not one referendum, but two. Icelandic voters were asked twice to vote for or against their government paying for the banking collapse. At stake were loan guarantees owed to investors in Britain and the Netherlands. Both times the people of Iceland voted no. Sveinn Gudmarsson is a reporter of Iceland's National Broadcasting Service. He says people in his country can definitely relate to what's happening in Greece right now.

Sveinn Gudmarsson: I think in general the Iceland population is very sympathetic towards the Greek population. As you said in introduction, Iceland went through similar turmoil only three years ago. It was a period of great uncertainty. We really didn't know what was going to happen; people saying our country has gone bust and as matter of fact, our living conditions for many years. It seems to be the same atmosphere in Greece right now, so I would think that the Icelanders are quite sympathetic to what's happening in Athens and Greece at the moment.

Werman: Well, I mean you're a reporter. What kinds of things have you heard your fellow Icelanders say in the past week or so about what's happening in Greece?

Gudmarsson: Well, in many ways people are saying that the situation is similar to what is here, and Greeks are victims of incompetent politicians and spoiled bankers. Icelanders were very angry three years ago when we were going through the same period. So I think people are now very sympathetic of the Greeks and their anger that is manifesting in Greece right now because just like we didn't feel that we were really at fault for bringing the country near bankruptcy, then in the same way I think most Icelanders don't feel the that Greeks themselves, at least not the Greek population, are to blame for what is happening.

Werman: What did Icelanders have to say today when Prime Minister Papandreou announced the idea of this referendum in Greece?

Gudmarsson: I think people were quite pleasantly surprised I think. In many ways it's similar to what happened here. We had the opportunity to vote not once but twice on very controversial legislation that would mean that maybe we would have to pay enormous amounts. But we said no and I think many people in Iceland are curious to see what the Greeks will actually say in their referendum.

Werman: What is the upshot then for Icelanders? Do they think a referendum is a valuable form of effecting policy?

Gudmarsson: Yes, very much so. This is really the first time ever that Iceland has had the opportunity to vote in a referendum on legislation. One year ago too when we had first referendum, the politicians were warning against voting on measures on this kind of policies and so on. And many feared that if Iceland voted no on this particular issue it would mean that we'd be barred from international lending market and nobody would lend us money anymore. But this was not realized and in general, I think people are much more positive about the possibility of being allowed to vote on big and small issues that come from the Iceland parliament.

Werman: I mean a lot of people today with the announcement by Prime Minister Papandreou in Greece about a referendum there on the bailout package are saying it's a very slippery slope and it can be dangerous for a country to set policy this way. Do you think Iceland set a precedent for Greece and Papandreou's proposed referendum?

Gudmarsson: Probably, at least Iceland felt that you can have referendums on issues such as fiscal policies. And I think it really gave the Icelandic population the chance to let off some steam about what was happening. I'm sure that the Greek population will in the same way feel probably more access to what's happened there if they have some say in it because as it sounds there seems to be a big gap between the politicians and the population.

Werman: Journalist Sveinn Gudmarsson in Akureyri in Iceland. Thank you very much for speaking with us.

Gudmarsson: Thank you.