A year ago, in March 2010, Iceland’s economy was so small that it did not warrant much attention when 93% of its voters rejected the Social Democratic-Green government’s surrender to Gordon Brown and the Dutch, the European Union (EU) bureaucracy and IMF demands that it impose austerity as penance for believing the neoliberal fairy tales about how bank deregulation and “free markets” would make it the richest, happiest country in the world. Indeed it seemed to be, according to United Nations data. But the dream was dashed after the Icesave electronic Internet bank branches abroad were emptied out by their proprietors.
Britain and the Netherlands paid out more than $5 billion to some 340,000 of their own depositors whom their own bank oversight agencies had failed to warn the about looting going on. Iceland’s taxpayers were told to bear the cost, as virtual tribute. The dream was the neoliberal promise that running to debt was the way to get rich. Nobody at the time anticipated that taking private (and indeed, fraudulent) bank losses onto the public balance sheet would become the theme dividing Europe over the coming year, dividing European politics and even threaten to break up the Eurozone. Continue reading