Iceland President on Crisis: “We Allowed the Banks to Fail, and in the End, We Were Blessed with Our Own Currency.”

The Icelandic people are getting through the crisis by not bailing out the banks, but putting them into bankruptcy. This is the report from Swedish public TV2 network news, on Nov. 28th, in a news installment including interviews with both the Iceland President Olafur Ragnar Grimsson, and an ordinary family, Eydis Hentze Petursdottir and Gudmundur Bjarni Sigurdsson. The father, Gudmundur, says in English: “What got me through the crisis was that, the country is still the same, but it is only financial. It is very narrow. Through all of this, I actually thought that, financial markets and that stuff, it does not matter all that much in the big picture of life.”

President Grimsson also said in English: “It also carries on very interesting lessons why Iceland is coming out of the crisis earlier than many other countries. Because in some ways we have done things differently…. We allowed the banks to fail. We did not pump a lot of public money into them. We devalued the currency. We were, after the collapse of the banks, blessed with having our own independent currency.”

Asked “what can Europe learn from Iceland,” he answered: “The lesson, in my opinion, whatever the country, if you want to bring a country out of a deep financial crisis, you have to do it, also by strengthening the democratic will and the social cohesion of the people. If you look at it, as primarily as a problem for the markets, I believe, you will ever succeed completely.” The subsequent part of the coverage shows footage from the protests against the Ice save law to allow billions of kronur in payments to bail out the losses of the U.K. and Dutch banks, and describes the courageous decisions by the President, which made him into a folk hero, to allow the people vote in two referendums to refute that law.

The President then says: “I came to this crossroads, that fundamentally the choice was simple: On the one hand, there was the democratic will of the people, and on the other the financial demands of other foreign countries and the European market. And my conclusion was, that democracy was a more fundamental part of what we are, not only in Iceland but in Europe, than the free market.”