1. avatar Brjann

    Carsten Valgreen once again shows what sort of a distasteful personality he is.

    Others have run into problems before, lets say Denmark in the early 1800’s and in the 1960’s (or was it 70’s), so have the British, so have the Germans etc, etc, etc.

    Of course this will be a hard adjustment for that small country, and it has to be said that the government of Iceland has done so many mistakes in their handling of the situation that you can start wondering whether somebody in cabinet is writing a book with examples of bad crisis management.

    I can’t help but think that a lot of Danes are full of Schadenfreude, and really cannot understand why so.

  2. avatar Benjamin Bach

    I don’t believe he is comparing the two nations in a literal way:

    »Det begynder at ligne Zimbabwe, men i Zimbabwe er der i det mindste en stat, der kan gøres til syndebuk«, siger økonomen.

    In English:
    “It’s beginning to look like Zimbabwe, but at least they have a government that can be held responsible”.

    So what he’s saying is that the Zimbabwe government is to blame for the current state of the nation. But he’s NOT saying that goes for Iceland. Which is your objection. So I think you completely misunderstood the point of the article.. which is picking on two things:

    1) The lacking actions of the Icelandic government and
    2) How the government isn’t entirely to blame. For instance their financial sector managed to act just as irresponsibly as their government.

    And maybe the countries and banks granting loans to Iceland are as likely responsible..

    And Schadenfreude… well, I guess we can all be happy that there are in fact consequences for irresponsible financial politics. Maybe this will teach people to vote with a little more caution and politicians to act upon problems.

  3. avatar

    […] North Atlantic”, presumably referring to Iceland’s economic situation, and not to its excellent human rights record. Meanwhile, a tour of Japan by the Iceland Symphony Orchestra has been cancelled by the Japanese […]

  4. avatar Mikkel

    It’s not schadenfreude. A lot of ordinary people on iceland will be the victims of this mess, and they aren’t at fault and I think we all feel sorry for them. But the greedy, speedy, risk-loving long haired webuytheworld-lot, and the political leadership, who has kept Iceland out of the EU to keep the fish to themselves and
    assure duty free shopping on the way home? Unfortunetaly they won’t suffer, so no schadenfreude.

  5. avatar

    Actually, the editor providing the headline might be at fault as much as the analyst doing the comparison (which I still don’t like for one second).

    But if we look at the economics, the point is that the Zimbabwean crisis is the result of Robert Mugabe’s government destoying the economy in an attempt to keep maintain its grip on the political power. And basically Zimbabwe today is one of the worst governed countries in the world.

    Iceland’s problems are of a different kind. There are many reasons for why the Icelandic government (and its predecessors during the 2000s) should be held responsible for at least parts of the present mess (I’m not an expert on Icelandic fiscal and financial policies) – and in a way because Iceland scores so well on a number of governance indexes, we should expect the Icelandic governments to have done more to prevent the over-expansion of the financial sector in Iceland.

  6. avatar John

    I cant help but envy you danes on having an intellectual giants like Valgreen expressing their opinions in the newspapers. I admire him, not only for his foresight in pointing out the financial troubles Iceland was heading in, but also, and more importantly for his extremely sharp sociological analyze on the mentality of small island nations.

  7. avatar Johannes Ingeolfsen

    Of course it is Schadenfreude and nothing else. Janteloven at its finest.

    A lot of Danes I have spoken with in the past few years have felt insulted by Icelandic businessmen coming to Denmark and buying old established businesses such as Illums, Sterling and Magazine du Nord.
    Therefore it gives them great pleasure when due to a world wide financial crisis Icelandic banks suffer solvency problems and are nationalized with grave consequences for the Icelandic nation and with the consequence that some Icelandic business ventures will suffer from the same solvency problems and go bankrupt this is not unique to Icelandic ventures of course, many overoptimistic danish ventures have gone bust as well with the result of several bank failures in Denmark among them Roskilde bank. There seem unfortunately to be something in the danish national psyche that delights in the misfortune of others. Danes appear to love the fall that comes after the pride. (as evidenced among other things by the Politikken article and Mikkel’s comment) As a longtime admirer of Denmark and the Danish people I truly wish they could get rid of this unpleasant national trait.

    There has of course been a lot of reckless investment and overextending in Iceland with this unfortunate result. The fact of the matter is however Icelandic banks are at least partly the victims of their own success and of systemic weaknesses of the European economic area, i.e. states (and banks) in the EU have the European central bank as a lender of last resort which can and has issued extra money when the banks need it. This cannot happen in Iceland as the Icelandic central bank can only issue Icelandic crowns which have a very limited market. Should the Icelandic central bank start to issue large amounts of crowns the currency would then devalue.
    Therefore when the Icelandic banks have grown to such relatively gigantic sizes compared to the national product they are at risk of grave liquidity problems when due to virtual market panic the financial markets dry up. To offset this risk the Icelandic government should have joined the EU and the EMU years ago then this crisis probably would never have hit Iceland.

    It is a fact that Icelandic banks have consistently shown solid profits and growth, they were not at all involved in the sub prime loan financial vehicles. They did however suffer as large American and European banks which had been their lenders and partners failed. Among them such giants as Bear sterns and Lehman brothers. Those facts and blunders in the fiduciary management of the Icelandic authorities led the Icelanders to this sad place.

    Regarding Carsten Valgreen’s article and the man himself I find it highly suspicious how many negative and blatantly unfair things he has to say now as well as what he has said earlier.
    The article contains a lot of inaccuracies and half truths originating with him, and I wonder if there could be ulterior motives, I wouldn’t be at all surprised to learn that Valgreen has been heavily involved with hedge funds betting against the very countries and financial institutions he attacks.
    Comparing Iceland to a failed state like Zimbabwe is absolute rubbish, Iceland is not a failed state nor is it going to fail, meanwhile Zimbabweans are dying from the lack of food and medicine.
    The by far the largest Icelandic bank Kaupthing failed due to Gordon Brown’s government freezing it’s assets for political gain. I wonder how Danske bank would fare in the current financial climate should a similar thing happen to it
    “De nordiske centralbanker hjalp islændingene tidligere i år med valutakøb. Den aktuelle finanskrise gør, at de ikke kommer igen med en redningskrans” this is untrue. In the last 24 hours 3 nordic central banks have offered their assistance.
    “I en sammenligning med den færøske bankkrise mener Valgreen, at islændingenes økonomiske adfærd og mangel på ansvarlighed….” This is just nonsense, as I stated before the banks have been profitable up to now and this has had little to do with inflated realty markets such as a lot of profits in the British and Danish banking sectors. The major problem was that they didnt have the requisite last resort backing of sufficent size

    As far as I am concerned he is the financial analysts equivalent of “the Sun” and Extrabladet i.e. he is the rectum of his profession. Journalists of course like sensational headlines so they turn to the likes of him for halfbaked populistic analyses.
    I expect better journalism from the Politikken staff.

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