Abstract
In 2008 Iceland experienced the deepest and fastest economic crisis ever recorded in peacetime, which included the total collapse of its financial sector, as well as significant erosion of its currency. This paper concerns a localized protest movement that occurred in the wake of the 2008 crash in Iceland: the mobilization of protest to a settlement deal, known as the Icesave settlement. We interviewed just over 30 actors involved in the mobilization, including politicians, activists, and academics. Our data show that both sides of the Icesave dispute drew on a set of three interwoven narratives, or framings of the debate, that respectively drew on ideas around natural justice, citizenship, and nationalism. Several key discursive intersections between these narratives and the political and economic landscape in the post-economic crisis not only rendered the Icesave dispute salient and commensurate with the experiences of Icelanders living through the crash, but also gave greater credibility to the no-Icesave campaign. We conclude by arguing that the Icesave dispute provides a unique lens onto central questions concerning democracy and the possibilities of meaningful citizen engagement and participation in an era of increasing globalization and of neo-liberal forms of economic governance. Our findings contribute to this literature by revealing some of the particularities of the Icelandic context that were important in creating the socio-historical moment that led to the success of the anti-Icesave movement.
Keywords
Introduction
In the fall of 2008, following a serious liquidity crisis in the global financial markets, the small island nation of Iceland experienced the deepest and fastest economic crisis ever recorded in peacetime. The effects of this crash included the total collapse of the Icelandic financial sector, as well as significant erosion of the currency (Broome, 2011; Danielsson, 2009; Guðmundsson, 2010; O’Brien, 2010; Thorhallsson, 2010, 2012; Thorhallsson and Rebhan, 2011; Wade and Sigurgeirsdottir, 2012). While Icelanders bore the brunt of the crash, foreign attention quickly focused on the plight of the Dutch and British account holders of “Icesave” accounts, high-interest accounts that were offered by subsidiaries of Landsbanki (The National Bank of Iceland) in these two countries. The collapse of Landsbanki led to a run on both Icelandic and foreign deposit accounts; in spite of a move by the UK (through invoking the 2001 Anti-Terrorism, Crime, and Security Act) to freeze UK-held assets, British account holders, as well as Dutch account holders, lost access to their deposits. The British and Dutch governments compensated their own citizens for their losses, in part through funds provided through the European Deposit Investors Guarantee Fund; they then demanded the repayment of these funds (with interest) by the Icelandic government.
The debate over Iceland’s responsibility for the repayment, known as the Icesave dispute, dominated political and social debate in Iceland between 2009 and 2012 (Curtis et al., 2012; Thorhallsson and Rebhan, 2011). Efforts by the government of the time to forge agreements with the Dutch and British governments were met with significant protest, as well as the mobilization of a counter-movement that demanded that the issue be taken to referendum. In the end, the Icesave issue was defeated in two separate referendums, and the issue was finally put to rest with a 2013 European Free Trade Court decision that held Iceland not responsible for repayment.
The economic crash in Iceland was only one of several other calamitous fiscal events that shook Europe and North America in the wake of the 2008 economic meltdown. Common responses to the crisis included the public bail-out of private corporations and fiscal austerity (Stiglitz, 2009, 2010). As with many other affected countries, the International Monetary Fund (IMF) stepped in with monetary aid (Sigurgeirsdóttir and Wade, 2014); the IMF in turn was understood to have sided with the UK and Netherlands in that one of the premises of the rescue package was the resolution of the Icesave issue (Broome, 2011). The fact that Iceland withstood international pressure to “play nicely” on the international stage and pay runs counter to expectation, especially given its size (ca. 320,000) relative to that of the UK (63 million) and the Netherlands (16.7 million). The success of the anti-Icesave social movement is also interesting given that, in general, the outcomes of the wave of social protest to austerity policies that swept Europe between 2010 and 2011 have been much more nebulous and harder to quantify (Benski et al., 2013: 554). Understanding the conditions and contexts under which the anti-Icesave movement mobilized and led to an effective policy response has thus several theoretical and empirical implications.
In this paper we present data from qualitative interviews with just over 30 respondents, conducted between August 2012 and December 2013. Our respondents included elected officials, academics, activists, members of political parties, and civil servants. We use this data to ask the following. (i) What narratives of participation and citizenship were used to frame the discussion around Icesave? (ii) How did these narratives shape linkages and alignments across social movement and political spheres? (iii) How were these narratives consonant with post-crisis economic and political contexts in Iceland, including other forms of political mobilization and fiscal effects of the crash? We conclude by suggesting that further work exploring conceptual and empirical intersections between the literature on governance and the social movement scholarship may prove fruitful for understanding social movement mobilization and political change in our current fiscal and political era.
Context: The 2008 economic crisis, the Icesave accounts, and the overnight collapse of a nation
A storm of economic errors and faults, including the lack of oversight of the Icelandic banking sector, the significant overcapitalization of Icelandic banks, especially in their overseas ventures, and the global fallout of the subprime mortgage crisis in the United States, led to the collapse of Iceland’s three major banks literally overnight (Curtis et al., 2012; Ingimundarson, 2010). In turn, this led to the rapid crash of Iceland’s currency (the krona) and a substantial gross domestic product (GDP) decline of about 25% (Thorhallsson and Rebhan, 2011). Due to peculiarities of the Icelandic banking system, in which a significant portion of mortgages and personal loans were either low-interest loans denominated in foreign currencies, or high-interest loans indexed to inflation, the economic crash resulted in a rapid spike in household debt levels, and a concomitant decline in the standard of living for Icelanders.
The crash ushered in an era of unprecedented social protest and grassroots political activity (Loftsdóttir, 2010, 2012; Thorhallsson, 2010; Thorhallsson and Rebhan, 2011). Prior to the crash, Iceland had been characterized by high levels of social trust and social consensus; in addition, there was shared national pride in the exploits of the “útrásarvíkingar,” (roughly translated as corporate raider-Vikings) who were largely considered responsible for the extraordinary economic growth experienced by Iceland between 2005 and 2007 (Einarsdóttir and Pétursdóttir, 2010; Loftsdóttir, 2012; Nielsen Gremaud, 2010). However, in the weeks following the crash, a seemingly spontaneous protest movement, the “pots and pans revolution,” coordinated through word-of-mouth and social media, gathered outside the parliament on almost a daily basis, to beat pots, pans, and other kitchen utensils loudly enough to disrupt the functioning of government (Arter, 2011; Hardarson and Kristinsson, 2010). The protests eventually led to the resignation of the center-right coalition government and the subsequent election of a center-left coalition government in early 2009 (recently defeated in the parliamentary elections of April 26, 2013, and succeeded by a coalition between the two right-of-center parties).
As an immediate measure to provide economic relief, the newly elected government negotiated loans from its Nordic neighbors in the first months of its election, as well as Poland (Broome, 2011; Centonze, 2011). Loans from the IMF, which were estimated to cover about 42% of its financial gap, were also secured, on the condition that Iceland negotiate agreements with all international creditors regarding lost deposits of Icelandic banks in foreign countries (Centonze, 2011). Subsequently, the government sent an envoy to broker a settlement with the United Kingdom and Holland regarding the repayment of the losses suffered by Dutch and British citizens due to the collapse of the Icelandic banks. More specifically, the government pledged to reimburse the Dutch and British governments of the moneys that they had paid out in deposit guarantees to their own citizens, up to a maximum of US$30,000 (Curtis et al., 2012). All of these efforts were made alongside a decision to open up negotiations for accession to the European Union (EU) on July 16, 2009 (Viðræður.is, 2013).
The first agreement to repay (Icesave I) was tabled and passed in the Icelandic parliament on September 2, 2009. This agreement named a total sum of €3.8 billion to be repaid, with interest, representing about 44% of Iceland’s GDP at the time. During discussion, the Icelandic parliament imposed a 14-year time limit to the debt repayment; this condition, however, was not acceptable to the Dutch and the UK governments. A subsequent revised agreement (Icesave II) maintained the same terms but with no expiry date to the debt. Icesave II was hotly debated in parliament, but was narrowly passed in December of 2009 (Hardarson and Kristinsson, 2011).
A number of activist groups from all sides of the political spectrum emerged to protest this second Icesave agreement (Loftsdóttir, 2012). In apparent response to the mounting public pressure, President Ólafur Ragnar Grímsson exercised the presidential veto right (for only the second time in Icelandic history) (Magnusson, 2010; Roper, 2002), thus forcing the issue to a referendum. In March of 2010 an overwhelming majority of Icelanders voted against the agreement (98.1% against). The reaction from the international community was unambiguous: the EU issued a statement on June 17, 2014, warning that Iceland would not be admitted into the EU unless it resolved its differences with the UK and the Netherlands over compensation of Icesave account holders (Barber, 2010). A subsequent revision (Icesave III) was again defeated by referendum in April of 2011 (59.77% against) (Landskjörstjórn, 2011). 1
However, after the second defeat, no additional efforts were made to broker a new deal. Instead, efforts to resolve the dispute have been located primarily in the court system. A decision in favor of Iceland was rendered in the court of the European Free Trade Association (EFTA) in January 2013 in November of 2013, the Dutch and British governments filed a claim against the Icelandic Depositors' and Investors' Guarantee Fund for about 566 billion Icelandic kronas or about US$4.5 billion (Johnson and Robertson, 2014). However, according to most recent estimates, close to 90% of the Icesave debt has already been paid out from the liquidated assets of the defaulted banks (Loftsdóttir, 2012; Þorgeirsson and van den Noord, 2013) the remaining amounts under dispute concern arrears and interest payments.
Understanding the outcomes of the Icesave dispute: Contentious politics and social movement success
Defining contentious politics
While there has been a great deal of scholarly work discussing the economic causes and impact of the 2008 global financial crisis, there has been comparably less interest in understanding its political and social contexts, as well as ramifications. It is apparent, however, that the 2008 economic crisis gave both credence and salience to the many champions of fiscal austerity programs, including the IMF, as well as creditor nations such as Germany, the UK, and the Netherlands. In turn, orthodox adherence to austerity regimes by politicians and policy-makers triggered significant social and political protest in Europe and the Americas, including, perhaps most famously, the “2011 Occupy movement,” but also a range of smaller, localized anti-austerity protest movements aimed at specific post-crisis fiscal restructuring initiatives across Europe and the Americas.
In Iceland, several protest organizations emerged during the Icesave dispute (the most organized of which was In Defense, created for the specific purpose of defeating the Icesave accords). In addition, debate over the Icesave deals took place in the mainstream media, on individual blogs (by politicians, students, journalists, and members of the public), and through social media; in addition, positions around Icesave were incorporated into political campaigns. 2 In other words, the Icesave dispute occupied political space that spanned grassroots activism and politics-as-usual. We draw here on the term contentious politics to mean the “politics in which people make concerted claims bearing on each other’s interests” (Tilly et al., 2004: 6). Contentious politics includes riots and crowds, protests, marches and sit-ins, revolutions, as well as protest cycles, and social movement organizations (SMOs) (Leitner et al., 2008; Tarrow, 1996a, 2001, 2011). In the context of the Icesave dispute, contentious politics refers to the entire range of ways in which Icelanders, as individuals, members of political parties, and members of grassroots organizations, participated in and attempted to influence the outcome of the public debate regarding whether the Icesave debts should be repaid to Holland and the United Kingdom.
Contentious politics and outcomes: Efficacy and effects of protest in the wake of the 2008 economic crisis
Contentious politics occurs when some segment of society organizes around the desire to produce social change (Tilly and Tarrow, 2006). How and under what circumstances contentious politics produces an intended outcome is a key question; at the same time, outcomes of protest are acknowledged to be exceptionally challenging to assess (Amenta and Young, 1999; Bernstein, 2003; Giugni, 1991; Staggenborg, 1995). In particular, it is often difficult to make causal links between activism and political outcomes, given the range of other variables that are at play in given political contexts. In response to this complexity, most scholarship on contentious politics and outcome usually focuses on one of three dimensions of movement success: (i) mobilization (i.e. Were activists able to generate enough internal (and external support) to render a movement viable?); (ii) policy outcomes (i.e. Did activism generate an intended policy or political response?); and (iii) culture (Did movement activism result in cultural or ideological change?) (Bernstein, 2003).
Two theoretical frameworks for understanding the outcomes of contentious politics have predominated for the last few decades: (1) frame approaches that focus on the strategic activities of collective actors to render their ideas actionable to potential supporters (Diani, 1996; Snow and Benford, 1988; Snow et al., 1986; Van Stekelenburg et al., 2009); and (ii) political process theories that examine the relationship between the activities and strategies of collective actors and structural features of the political context (Armstrong and Bernstein, 2008; Giugni, 1998; Kitschelt, 1986; McAdam, 2010; Tarrow, 1996b).
Frames are “purposive guides to action” constructed by collective actors (Tarrow, 1992: 177); frames both diagnose social problems and provide actionable solutions in ways that build support among those sympathetic to a particular cause and encourage participation (Snow et al., 1986). The extent to which frames are successful in mobilizing support, in turn, is thought to be primarily a function of their resonance: among other things, resonant frames are those that feel and sound empirically credible, are commensurate with experiences of movement supporters, and are internally consistent (Allen, 2000; Babb, 1996; Benford and Snow, 2000). Frame resonance is increasingly understood in terms of its intersections with structural features of the political context; in particular, whether or not a frame is empirically credible and experientially commensurate rests on its “fit” with economic and political realities (Hallgrimsdottir and Benoit, 2007; Hallgrimsdottir et al., 2013; McCammon, 2012).
Political process theories, on the other hand, focus explicitly on understanding what features of the political context lower or raise the cost of protest and, by extension, constrain or enable movement success (Tilly, 1978). The key concept in this literature is the political opportunity structure (POS), constituted out of both static features of government as well as the dynamic events that reshape them (Kitschelt, 1986; Lee, 2011; McAdam, 2010; McAdam et al., 1996; Meyer and Staggenborg, 1996). The POS is a loose conceptual framework that encompasses a range of political phenomena (electoral politics, institutional configurations, historical precedents of political protest); its central premise though is that the outcomes of contentious politics is largely dependent on “institutional structure and the ideological disposition of those in power” (McAdam, 1996: 25).
What happens, though, when “those in power” are themselves in positions of political dependence? Much of the anti-austerity protest that occurred after the 2008 economic crisis took place within political contexts that were simultaneously local and global. Claims around Icesave, for instance, were directed towards Icelandic elected officials, who were themselves embroiled in difficult and tense relationships around this issue with officials from the IMF, EFTA, and the United Kingdom and Holland (Broome, 2011; Danielsson, 2008). For instance, Broome (2011) argues that the sovereignty costs are particularly high for small states as they negotiate with supra-national financial agencies, such as the IMF; the point here is that the POS needs to adequately account for the fact that political actors do not always constitute the “end of the line” when it comes to making domestic policy decisions. Indeed, the relatively modest impact of both the Occupy Movement, as well as anti-austerity protests across Europe, illustrates the challenges facing contentious politics in our current context.
Methods and data
Our data are drawn from qualitative interviews with 30 actors involved in the Icesave dispute, including activists, political actors, and academics, conducted at three different points in time: August 2012, December 2012, and July 2013. We asked respondents to speak both specifically about the Icesave dispute as well as more generally about their sense of the political context in Iceland during and in the aftermath of the 2008 economic crisis. Respondents were identified primarily through consulting public lists of political party and activist group memberships, as well as blogs and social media sites (primarily Facebook, but also Eyjan and mbl.is, both Icelandic on-line news sites that host numerous bloggers) for individuals who were highly visible during the Icesave debates. Respondents were recruited through direct email or phone contact. Effort was made to recruit across the political spectrum to get a wide as possible range of viewpoints. All the interviews (with one exception) were conducted in English and transcribed verbatim; one respondent wished to be interviewed in Icelandic and the transcript from that interview was translated into English by the first author. Data was entered into Dedoose, a qualitative software analysis package and coded and analyzed using an iterative open coding approach. Codes were developed by the first author and independently verified by the second author.
We use these interviews to reconstruct what narratives of participation and citizenship were used to frame the discussion around Icesave and how these narratives shaped linkages and alignments across social movement and political spheres. We supplement our interview data with a range of other material available in the public realm, most notably political blogs, newspaper reports, and parliamentary publications.
Before presenting our findings it is worth making a brief comment on the constraints associated with anonymity and confidentiality in the context of this study. Iceland is a very small country; the activist and political communities are even smaller. Many (if not most) of our respondents are known to one another personally, which poses a central challenge to data confidentiality, although this is mediated somewhat by the fact that all interviews were conducted in a second language. To protect anonymity we have elected to minimize the use of non-paraphrased entries from our interviews. We identify our respondents with a randomly generated alphabetical letter and a short descriptor identifying their location within the field of contentious politics around Icesave.
Findings
We present our findings in three sections that correspond to the three questions that were asked at the outset of this paper as follows. (i) What narratives of participation and citizenship were used to frame the discussion around Icesave? (ii) How did these narratives shape linkages and alignments across social movement and political spheres? (iii) How were these narratives consonant with post-crisis economic and political contexts in Iceland?
What narratives of participation and citizenship were used to frame the discussion around Icesave?
We asked our respondents to reconstruct arguments for and against the Icesave repayments, and to discuss these as well their own personal involvement in the Icesave dispute; in addition, we invited respondents to speak generally about how the economic crisis, and the politics around Icesave, have shaped governance, political opportunities, and citizen engagement in Iceland. Our data show that both sides of the Icesave dispute drew on a set of three interwoven narratives, or framings, of the debate, that respectively drew on ideas around natural justice, citizenship, and nationalism. Below we outline how our respondents articulated these narratives. We follow with a discussion regarding the resonance of these frames by showing their intersections with certain structural features of the Icelandic political and economic context in ways that had particular repercussions for the salience and credibility of the anti-Icesave campaign. We end with a discussion of how intersections between governance structures and the Icesave protest movements may provide further insight into the circumstances under which a small island nation such as Iceland was able to withstand pressures from international organizations to “play nicely” and pay up.
“The moral injustice of it all!” (B, activist): Morality framing of the Icesave debate
By and large, our respondents had considerable familiarity with EU banking laws governing the insurance of bank deposits, as well as the domestic and international fiscal policies that had allowed for the expansion of the Icelandic banks into Holland and the UK. However, while respondents often drew on sophisticated and technical arguments when discussing the Icesave debts, these arguments were generally presented within a highly normative framing of the issue that centered on moral reasoning, that is, questions of right and wrong. Key to this framing of Icesave was the idea that principles of natural justice were being violated through the Icesave repayment deals. Respondents spoke, for instance, about the “injustice” of the socialization of “private debt…(that) should not be dumped on (the) public” (D, politician). Further to this, this private debt had been accrued through immoral business practices: “The banksters had robbed them (Icelanders) by the daylight” (S, politician).
Importantly, this normative framing was not presented as an alternative to legal or technical arguments, but rather as both complementary to other viewpoints while, at the same time, having higher authority. For instance, viewing Icesave through a moral lens, according to one respondent, revealed how, in spite of other appearances, the government was “trying to find a way around the law” through the Icesave settlements (G, activist,), while another argued that an immersion in the legal aspects of the Icesave deals would eventually reveal to anyone the “moral injustice of it all” (B, activist).
Interestingly, respondents who had been in favor of the Icesave settlements also invoked moral arguments. Some respondents, for instance, suggested that the very act of allowing the Icesave accounts to have been opened in the first place was a “knowingly immoral move…” and that the “government had to take responsibility for it” (T, academic); other respondents suggested that all Icelanders had somehow taken part in an active defrauding of British and Dutch Icesave account holders: “we (Icelanders) have to take responsibility for our bad behavior. We behaved badly.” (M, politician).
Icesave/Iceslave: 3 Nationalist sentiment and the no-Icesave campaign
These later arguments used moral reasoning as a way of suggesting that Iceland had an obligation to the international community to pay back the Icesave debts. However, obligations to the international community were more commonly referenced as part of the no side. In particular, the anti-Icesave campaign drew a great deal on historically rooted understandings of Iceland’s tenuous and often fraught relations with their much larger European neighbors, in particular the historical conflicts with the United Kingdom over Iceland’s fishing grounds (the “Cod Wars”) in the 1970s. Iceland was described as being under “attack from the Dutch and Brits” (B, activist); more explicitly, the Icesave deal threatened “the sovereignty of Iceland because in the agreement the British and Dutch could take the properties of Iceland if we were unable to honor the agreement” (S, politician). Similarly, the Icesave dispute was identified unequivocally as a “struggle for independence” on a continuum of sovereignty disputes, including “opposition to the American army in Iceland. The Cod Wars, and the debate about joining the EEA (European Economic Area), the European Union and…the Icesave case is just one of these issues” (R, activist). In some ways, these historical disputes, in particular the Cod Wars, provided a rich symbolic resource for the anti-Icesave campaign, in particular in terms of providing metaphorical and mythical understandings of Iceland’s exceptionalism: “Our independence war was with Great Britain, the Cod Wars…. And the issue on Icesave was kind of a rerun of this thing where Great Britain was trying to take little Iceland by its fists and shake it around “(J, activist).
“After the crash…. Now, we have to do something as citizens.”(E, activist)
As seen above, many respondents clearly positioned the dispute around Icesave as part of a larger struggle and fight for national identity that had taken on new significance in the post-crisis context, dominated as it was by, on the one hand, IMF involvement in fiscal recovery measures, and negotiations for EU accession on the other hand. Voting against Icesave was thus an important defensive strategy for a small country, interacting on a large and unfriendly global stage. In turn, these notions of national defense called forth related ideas that located Icesave activism as part of a general need for the greater and more responsible practice of citizenship in Iceland after the economic crisis. Several respondents discussed how the crash altered political discourse as well as opportunities for activism: The biggest thing that has changed since 2008 is…this is the first that comes to mind…it really opened up a space that just simply wasn’t there before the crash. The political debate in Iceland before the crash was very narrow, capitalism, neoliberalism, there wasn’t very much space for other ideas, ideas outside the box. (L, activist)
It is in this context – in which the Icesave dispute was understood as an exercise of responsible citizenship – that referendum results gained significance beyond their implications for state finances or international relations. “The referendum was a victory for the people and for democracy” (C, activist) and were proof of how citizens “can make a difference in society if [you] put your mind to it” (B, activist); as described by Margrét Tryggvadóttir, a member of the political opposition, the referendum results represented the victory of “David over Goliath” (Tryggvadóttir, 2013).
How did these narratives shape linkages and alignments across social movement and political spheres?
Since 1930, four political parties have dominated Icelandic parliamentary politics: (i) a right-wing party (the Independence Party (Sjálfstæðisflokkurinn) established 1930); (ii) a center-right party (the Progressive Party (Framsóknarflokkurinn) established 1916); (iii) a center-left party (People’s party (Alþýðuflokkuring)) from 1916 to 2000, when it became the Social Democratic Party; and (iv) a left-wing party, the Communist party, called Left-Green since 1999 (Vinstri Grænir). These four parties are often referred to as Fjórflokkurinn (literally, the quad-party), a term that conveys a sense of fixity in Icelandic politics, as well as a perception of shared interests and alliances across the four parties.
The 2008 economic crash was seen by many as a signal of significant change to come to Icelandic politics. In particular, many respondents expressed the view that the old division of left and right was no longer valid and that this dissolution of left/right politics was particularly exemplified by the Icesave dispute: “it’s far too complicated to be left or right issue” (K, politician). Complicating the political aspects of the debate was the fact that, for many observers, the contentious politics around Icesave were played out on a rapidly shifting political landscape. Of particular importance here is that the two left-of-center governing parties, the Social Democrats and the Left-Greens, when they took power, had to take over negotiation in-progress about Icesave, as well as with the IMF for emergency loans. At the same time, although it was a ruling right-wing party that had initially begun repayment negotiations, both right-wing parties took a stance against Icesave after their electoral defeat in 2009. For some, then, the negotiation marked a betrayal of fundamental leftist values: “After the Left-Green came to power, it’s a right-wing…you know…it went with the IMF. It’s a left-wing party? No. It hasn’t been since it came to power” (S, politician). Similarly, Before 2008 there was a very clear Left and Right distinction. After 2008 that became unclear because you have the right wing talking about things better for a society as a whole. It was a funny twist around. And the left defending the moneymakers and corporations. The dice were in the air and people didn’t know what would happen. Trust in general in congress and politicians faded away. (B, activist) With Icesave it’s possible to look at it in two narratives. One is that this is a huge grassroots movement that wanted to save the country from a terrible calamity…. (But)…in many ways you have to think of Icesave as a politicized issue. The way it’s built up by the Independence Party, the ideologues, as a nationalistic issue. Is this a grassroots movement or a propaganda ploy to make the government that took over after the crash look that bad…for me this is the question…It (has) made the government look horrible and it hasn’t recovered from the two referendums it lost. And of course it became the ticket to get the president re-elected. He was scorned, despised before the veto. These were his meal tickets into the next elections. (T, politician) And we had to secretly meet with…the opposition, the IP back then…to become active against this agreement, to stop it…When I was in parliament I used to have secret meetings with them. The Icelandic parliament has no good lawyers. In Defense had good lawyers. (S, politician)
How were these narratives consonant with Iceland’s post-crisis socio-political context?
A central premise of the sociological literature on social movement framing is that social movement ideas, values, and prescriptions for change have to resonate in some manner with the lived experience of potential activists and adherents in order to mobilize support (Benford and Snow, 2000; Hallgrimsdottir, 2006; Hallgrimsdottir et al., 2006, 2013; Oliver and Johnston, 2000). Yet, despite the predominance of the Icesave dispute in politics and the media, it is difficult to argue its relevance and salience to ordinary Icelanders.
Our findings suggest that two points of consonance between the narratives used to frame Icesave narratives and other elements of the post-crisis socio-political context help explain how the Icesave issue was rendered salient to Icelanders: (i) the rise in household debt brought about by the economic meltdown and (ii) concerns that a democratic deficit was responsible for the crisis itself.
Prior to the crash, most personal debt in Iceland was held in loans that were either indexed to inflation or indexed to currency; as a result, when the banks defaulted and the currency fell, personal debt held by individuals also skyrocketed. The effects of this were profound: for instance, in December of 2009 around 42% of mortgages and bank loans were in arrears (Stjórnarráð Íslands, 2012) and, between 2009 and 2013, an average number of three families per day saw their houses repossessed due to default (Gylfason, 2014: 12). 4 Concerns over household debt led to the mobilization of at least one grassroots social movement (Hagsmunasamtök Heimilinna) and was the focus of several of the new political parties. At the same time, our respondents suggested that political solutions to household debt were “impossible” (F, activist), due to political expediency but also because “with the household debt we are in the hands of the bankers” (G, activist). The Icesave dispute and the proffered solution, however, offered a way to punish the banks, by refusing, symbolically and in practice, to take on the responsibility for the actions of “bankers and politicians in bars or whatever [that] made these rules” (H, activist) that created the conditions for the crash.
Similarly, the rejection of Icesave as an exercise of responsible citizenship was consonant with a more general concern regarding the health of Icelandic democracy. As with household debt, the notion of a democratic deficit was a key focus of both political and grassroots mobilization. Among other things, the significance of this question is reflected in the formation of the citizen-led Icelandic Constitutional Assemblies in 2009, as well as the Constitutional Assembly appointed by Parliament in 2010.
Discussion and conclusion: Why did Iceland not play nicely after the 2008 economic crash?
Protest related to the Icesave agreement was couched around a number of issues, including in particular its implicit intention to repatriate a debt incurred by private corporations on foreign soil, and thus redistribute the burden of their repayment onto taxpayers. In other words, the agreement can be understood as an instance of what Joseph Stiglitz has identified as the privatization of gain and the socialization of loss (Stiglitz, 2010) as a response to economic downturn. Recent economic rescue plans in Europe, as well as bail-outs of private sector actors in Canada and North America, have been met with similar criticisms (Bellofiore and Halevi, 2011; Hartleb, 2011; Onaran, 2011). In addition, resistance to the downloading of debt onto citizens, especially through economic austerity measures, has inspired protests and riots throughout Europe, including Greece, Spain, the United Kingdom, and (most recently) Romania, as well as the recent (and global) Occupy Movement (Clement, 2013). However, only in Iceland have these “socialization of debt” policies been put to and defeated by democratic vote.
The Icesave dispute thus provides a unique lens onto central questions concerning democracy and the possibilities of meaningful citizen engagement in an era of increasing globalization of neo-liberal forms of economic governance (Guarneros-Meza and Geddes, 2010; Somerville, 2011). Scholars have identified the particularities of the contexts of participation, and especially the intersections between lived experiences of citizenship, narratives of citizenship, and the spaces and places in which citizenship is practiced as of notable interest in this regard (Cornwall et al., 2011; Lister, 2007). Our findings contribute to this literature by revealing some of the particularities of the Icelandic context that were important in creating the socio-historical moment that led to the success of the anti-Icesave movement. Our explanation here draws on Ragin’s concept of multiple-conjunctural causation; more specifically, our case study illustrates how a set of historically specific conjunctures of causal mechanisms had the result of enabling the success of the anti-Icesave movement (Aus, 2009; Ragin, 2004). In particular, we argue that there were several key discursive intersections between the narratives used by anti-Icesave activists and the political and economic landscape in the post-economic crisis era that rendered the Icesave dispute salient, credible, and commensurate with the experiences of Icelanders living through the crash.
Recent events in Iceland, in particular the return to power of the right-wing parties that had led Iceland before the crash, however, lead us to speculate that the Icesave issue opens up questions related to the role of governance (both domestic and supra-national). Governance refers to the dynamic way in which politics is practiced on the ground as, increasingly, governmental and non-governmental organizations must engage meaningfully in civil society in order to conduct public affairs and take policy decisions (Fuller and Geddes, 2008; Geddes, 2006; Guarneros-Meza and Geddes, 2010). The concept of governance has taken on renewed significance in terms of the implications of supra-national economic and political agreements, such as the EU and the North American Free Trade Agreement (NAFTA) on the functioning and efficacy of governments in the context of these agreements (Brunet-Jailly, 2004; Denters and Rose, 2004). For instance, to the extent that the Icesave issue allowed for new ideational connections and discursive alignments between political actors and social movement activists from all sides of the political spectrum, contentious politics around Icesave may have contributed to a temporary remapping of governance structures in Iceland. In particular, there is some evidence to suggest that politics around Icesave became a tipping point at which left-wing parties lost discursive control of their traditional ideological territory – that is, the protection of public interest – which was ceded first to social movements and new political parties in the immediate aftermath of the 2009 election and then, ultimately, to the right wing. Secondly, this paper does not address other important questions tightly related to the Icesave crisis, such as the intersection between protests and national politics in the context of supranational regulatory governance regimes, such as whether the Icesave dispute may have altered the political costs for elected officials of resisting extra-national governance. Both of these questions suggest that further work exploring conceptual and empirical intersections between the literature on governance and the social movement scholarship may prove fruitful for understanding social movement mobilization and political change in our current fiscal and political era.
Footnotes
Funding
This research was supported by an Insight Development Grant from the Social Sciences and Humanities Research Council of Canada.