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?
Now Iceland's women are rising to the top ranks—in politics, too—and they want to make everything better. Writer Hallgrimur Helgason says the new star is Johanna Sigurdardottir, 66, a Social Democrat, who had previously been known to most Icelanders as an honest and unimposing politician. "My time will come," she once railed at her opponents angrily almost 20 years ago.
At the start of February, she replaced Haarde, becoming the country's de facto bankruptcy manager and also Iceland's first female prime minister. The Social Democrat is seen as the personification of trust-building measures. According to public opinion polls, a clear majority—60 to 70 percent depending on the pollster—would like to see Johanna Sigurdardottir lead the country after Saturday's election, regardless of what parties wind up forming a government coalition.
"The people here are really tired, they distrust the old system," says Hallgrimur, who already wrote years ago about failure and people who go astray in Iceland with his novel "101 Reykjavik." "Johanna surprised all of us," he says.
The elegant, white-haired woman has been a member of parliament for 31 years and has served as minister for social affairs several times. And yet she still embodies the desire of Icelanders for a new beginning. She hasn't been tainted by scandals and sleaze, and she also promotes trust, modesty and people skills. Since taking office almost three months ago, she hasn't given any newspaper or television interviews.
Women Symbolizing Change
She's not hunting for headlines, but has made them anyway, as an open lesbian. In surveys, her Social Democrats are currently polling at around 35 percent, an all time high for the party. The Independent Party, which was in power uninterrupted for almost 18 years, is at 26 percent. There is much talk in Iceland these days of a new culture and new values—of a change. Women want to become the symbol of it. The managers put in place to, at least temporarily, lead two of the country's collapsed banks, Glitner and Landsbanki, are women. And five of 11 members of Johanna's interim cabinet are female—a higher number than ever before in Reykjavik's ministries.
The new education and science minister, Katrin Jakobsdottir, 33, is one of them. She is deputy head of the left-wing Greens and together with Finance Minister Steingrimur J. Sigfusson is to lead her party into a coalition together with the Social Democrats.
Steingrimur is an old political warhorse and ex-Marxist—a relic of political history who is now trying to save capitalism. "Someone's got to do it," says Steingrimur, a pragmatist like many of his countrymen. He's already proved that he's capable of it. In 1988, the country fell into a slump after having enjoyed an unprecedented economic boom. Exports and economic growth plunged, as did the value of the krona.
As farming minister, Steingrimur helped to push inflation back down and to lay the ground for what became the Icelandic success story. "I've proved that I can do it," he says with manly self-confidence. He adds that he was also proved right in his warnings in a book three years ago about the risky financial course the country was taking. "We were the fiercest critics of the ideology that led to the collapse," he says, "now we're paying the price for that."
Steingrimur is leading the party with his experience and confidence. But without his wife by his side, the Greens would scarcely be at their current levels of 26 to 28 percent in opinion polls. They are well placed to continue their current temporary coalition with the Social Democrats as a stable government after the election. Katrin, the education minister, is an important guarantor of that. She adds green color and symbolizes the new beginning. She has only had a parliamentary seat for the past two years and she's already setting the tone. She's demanding a real change in values.
"The crisis management must be green," she says and pledges to use Iceland's virtually inexhaustible natural resources for the recovery—hydro energy and geothermal energy for example, and the country's pristine natural beauty to attract tourists. Are women better at governing? "We had become too accustomed to old structures," she says.
The managers of Audur Capital agree. They want economic success but not at any price. "We don't want to invest in things we don't understand," says Halla. Her partner Kristin, 43, adds that they don't want to engage in business deals "that will be at other people's expense tomorrow."
The two of them collaborated with eccentric pop diva Björk to set up a fund named after the singer which aims to invest in sustainable environmental projects and local cultural enterprises. Profits with principles.
Women such as Halla are calling for a "new equilibrium" for the country. "That's got nothing to do with feminism," she adds hurriedly. "I want to do things not for women, but for all of society."
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