Women Reach for Power in Iceland

Iceland's women blame men for the economic crisis that drove their nation to the verge of collapse. This weekend, they may elect their first female prime minister

By Manfred Ertel

It's not shadenfreude that can be read between the lines when Halla Tomasdottir talks about Iceland's financial crisis and her country's bankruptcy, but there may be a bit of satisfaction. "A lot had gone wrong, some things didn't make sense and it couldn't go on that way," the economist says. "We warned it would happen."

Halla was general director of the chamber of commerce when she issued those warnings, but nobody wanted to listen to her advice. She then parted ways and started her own company together with banker Kristin Petursdottir. Kristin had been a manager at the British subsidiary of the crisis-stricken Icelandic bank Kaupthing. Together, Halla and Kristin formed Audur Capital, a financial and investment company that would take a new path.

They established it almost two years ago to the day. Today, Audur Capital is one of the few firms in the Icelandic finance sector that is actually turning a profit—perhaps the only one, though no one dares to say exactly. The company is growing, with 22 employees already. "We're still hiring," says a proud Halla Tomasdottir. The company currently has around 15 million Icelandic krona (around €90 million) in assets.

At Audur, there's a simple recipe for success. "We've brought greater female values into the financial world," says Halla. The company isn't interested in investments that quickly generate high yields. Instead, they focus on sustainable investments in projects that make as much sense socially and environmentally as they do for the investors themselves. The women call their business maxim "emotional capital," or "profit with principles." But is that a recipe that can be enough to get Iceland out of its current mess?

The old system plunged the North Atlantic island deeper into the current financial crisis than any other country in Europe and the entire industrialized world. Iceland was only able to avert state bankruptcy with the aid of billions in loans from the International Monetary Fund. Its main banks were nationalized as were many important companies including the country's largest car dealership.

The unemployment rate soared from only 1.2 percent to around 10 percent. By summer, when students graduate from high school or university, it is feared that figure could reach a level of 17 percent. The inflation rate is already 15.2 percent, as well. The krona currency is in a state of freefall as is purchasing power, and there is no end in sight.

Men To Blame for Iceland's Woes

For some time now, the main question people are asking isn't how far the country can fall. The public debate in the run-up to Saturday's national election is who is responsible for the mess Iceland is in.

As one of the main culprits, central bank governor David Oddson, who had previously led the country for 13 years as Iceland's longest-serving prime minister—in the end in an almost autocratic manner—was forced to step down after weeks of public protests. Prime Minister Geir Haarde of the conservative Independent Party also had to go. Bank managers and speculators—almost exclusively men—have also been pilloried in what amounts to the collapse of an entire profession.

"The crisis is man-made," claims banker Halla, 40, who like all Icelanders, is only addressed by her first name. "It's always the same guys," she says. "Ninety-nine percent went to the same school, they drive the same cars, they wear the same suits and they have the same attitudes. They got us into this situation—and they had a lot of fun doing it," she says. Halla criticizes a system that focuses "aggressively and indiscriminately" on the short-term maximization of profits, without any regard for losses, that is oriented on short-lived market prices and lucrative bonus payments. "It's typical male behavior," says Halla, who compares it to a "penis competition"—who has the biggest?

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