Icesave, yousave, we all save for... Icesave!!!

So, for our friends who are not here in Iceland with us, you may be wondering what is this crisis all about? Well, It's complicated, it's much the same as our financial crisis, only intensified, and more recently it involves the failure of Icesave. Read all about the current events surrounding Icesave in the sidebar link to the Icelandic News in English. I will also give a brief synopsis and discuss the effects of the wider crisis on Iceland and the church as a whole.

In 2007, Iceland was one of the most prosperous nations in the world, I believe top six if I remember right. However, in 2008 the three major banks failed and the government took over them and restructured them, essentially placing them in bankrupt status. The combined debt of these three banks was close to six times the gross domestic product of the country, so you can see how heavy of a hit this was to the nation.

One of the banks, Landsbanki, had a foreign operation in the UK and Netherlands called Icesave, and when Iceland was doing well, several hundreds of thousands of people from both of those countries deposited money within that bank. The question is, whether these foreign deposits were insured the same way as domestic deposits. After the collapse of the bank, assets were frozen, and as you can understand, it would be difficult to pay back the depositors with money that has seemingly disappeared overnight due to the devaluation of the Kronur that happened over the course of 2008.

Of course, the UK and The Netherlands want their citizens to have their money, and Icelanders for the most part, want to respect this. The question is how this is to be paid back? Though Iceland past legislation in August saying that it will be paid back, that legislation protects the interests of the Icelandic people by not committing them to having to pay too much in one year and extends the period of repayment until 2023. During this time, they would have loans from the UK and Denmark, and other countries, that would help this process along. However this was not quite agreeable to the UK and so under pressure other legislation has recently been passed in the Althingi by a margin of 33-30 that is more favorable to the UK's desires.

The problem seen by many Icelanders is that this measure would place the load of the mistake of one bank upon the already burdened back of the people of Iceland. Early this year a petition of sixty to eighty thousand people, nearly a quarter of Iceland's population was sent to the President, who largely plays a figurehead role, to veto the bill, which he did. By vetoing the bill, the Althingi could either withdraw the bill or put it to a referendum, a public vote. The Althingi decided to put it to a public vote which is scheduled to happen before March 6th. Iceland is unique in that they are able to have a referendum to let their people decide. On the one hand there is the argument that voting for this bill would impose heavy taxation upon the people, up to 55% from the 40% that they already pay. On the other hand, their is concern that by not passing the bill Iceland's admittance into the EU could be delayed indefinitely.

When we were at Skalholt, Professor Dan Olsen gave a three part series of lectures that it at the heart of what a crisis was and what it might mean for the Icelandic people, and more particularly, how the Icelandic pastors might help their parishes cope with this identity. One passage that I think is particularly applicable to this situation is that of Luke 16:1-13, which is the parable of the Shrewd Manager, a most difficult parable, but one that speaks of forgiveness and grace none-the-less. In a lot of ways, it seems that Iceland may be seeking that shrewed manager who calls the debtors and lessons their debts.

Iceland has a long road ahead of them, and part of that road walked will be recreating their identity. Dan also had some poignant comments on this which really seemed to hit the hearts of the Icelandic pastors in Skalholt. It is something that I as an outsider can not fully comprehend, and yet, I think that it is a message that speaks to me as an American just as well. Things have been particularly hard economically for our country as well this past year and I hope that we do not come out of the recession unchanged as a people. I believe that Dan is right in that it is our responsibility and joy as pastors and ministers to lead the people in a rediscovery of an identity.

God of Grace and Mercy, We humbly come before You and ask for forgiveness of our mismanagement of our resources and Your blessings. We pray that in the midst of this crisis You do not leave us unchanged but help us to find an identity that is centered on the cross and Christ. In Jesus' name we pray, Amen.