Power and Interests in International Relations: Why Iceland Went From Desire to Despair
Author
Ingvarsson, Ingvar Örn
Term
4. term
Publication year
2009
Pages
108
Abstract
I oktober 2008, efter Lehman Brothers’ konkurs, brød Islands finanssektor systemisk sammen, hvilket udløste en konflikt med Storbritannien, Nederlandene og Tyskland. Island stod i en valutakrise og tog vidtgående skridt for at forhindre, at økonomien gik i stå, bl.a. ved at garantere alle indenlandske bankindskud. Storbritannien anvendte antiterrorlovgivning til at fryse islandske bankaktiver, især pga. Icesave, et opsparingsprodukt der var populært blandt britiske kunder. Der opstod en bilateral strid: Island hævdede, at staten ikke havde pligt til at indfri indskudsgarantier under et systemisk sammenbrud, mens Storbritannien mente, at Island diskriminerede efter nationalitet. Afhandlingen analyserer forløbet med realistisk politisk teori samt neoliberale og merkantilistiske økonomiske perspektiver. Island søgte støtte fra IMF og indsendte en hensigtserklæring (letter of intent). Ifølge afhandlingen godkendte IMF erklæringen, men tilbageholdt midler, indtil Island accepterede ansvar i Icesave-sagen. Studiet vil forklare, hvorfor Island blev presset til at acceptere disse forpligtelser. Forskningsmetoden er primært dokumentstudier, suppleret med to feltrejser til Island, et insiderinterview og baggrund fra informanter (ikke brugt som bevis). Afhandlingen hævder, at Storbritanniens reaktion var ude af proportion, fik utilsigtede konsekvenser, og—med støtte fra EU og skandinaviske lande og indflydelse i IMF—fremtvang islands accept af ansvar. Den anfører også, at forpligtelserne pr. indbygger oversteg Tysklands krigsskadeerstatninger pr. indbygger efter 1. verdenskrig. Den argumenterer for, at den islandske regering udviste politisk naivitet og manglede et realistisk perspektiv, og at den var modtagelig for løfter om hurtig EU-tilslutning fra britiske udenrigsministerielle embedsmænd. Hovedkonklusionen er, at Island var politisk, men ikke økonomisk, offer for omstændighederne. For at opretholde tilliden til Europas indskudsgarantisystem (ordninger der sikrer indskud op til et fast beløb), som Island er omfattet af via EØS-aftalen, måtte Island acceptere forpligtelserne; ellers kunne tilliden kollapse og der opstå bankruns i banker med aktiviteter langt større end hjemmemarkedet. Afhandlingen anfører, at EU som svar besluttede at hæve indskudsgarantier, hvilket vil begrænse banker fra små økonomier i at operere i større markeder og kan kollidere med EU’s fire friheder. Den vurderer, at kriser kræver ændringer, og at Island sandsynligvis vil søge hurtig EU-medlemskab for at afbøde følgerne af Icesave-sagen.
In October 2008, after Lehman Brothers collapsed, Iceland’s financial sector suffered a systemic breakdown, triggering a dispute with the United Kingdom, the Netherlands, and Germany. Facing a currency crisis, Iceland took extraordinary steps to keep the economy from seizing up, including guaranteeing all domestic bank deposits. The UK used counter-terrorism legislation to freeze Icelandic bank assets, largely because of Icesave, a savings product popular with UK customers. A bilateral dispute followed: Iceland argued the state had no duty to honor deposit guarantees during a systemic meltdown, while the UK said Iceland was discriminating by nationality. The thesis analyzes these events through realist political theory and neoliberal and mercantilist economic perspectives. Iceland sought IMF support and submitted a letter of intent. According to the thesis, the IMF approved the letter but withheld funds until Iceland accepted liability in the Icesave dispute. The study aims to explain why Iceland was pressured to accept these liabilities. The research is mainly desk-based, with two field trips to Iceland, one insider interview, and background input from informants (not used as evidence). The thesis contends that the UK’s reaction was disproportionate, had unintended consequences, and—backed by the EU and Scandinavian countries and influence within the IMF—coerced Iceland into accepting liability. It further claims the per-capita liabilities exceeded Germany’s per-capita reparations after World War I. It argues the Icelandic government showed political naivety and lacked a realist outlook, and was receptive to promises of rapid EU accession from UK foreign ministry officials. The main conclusion is that Iceland was a political, but not economic, victim of circumstances. To maintain confidence in Europe’s deposit guarantee system (schemes that insure bank deposits up to a set limit), which Iceland participates in by adopting EU law via the EEA, Iceland had to accept the liabilities; otherwise, trust could have collapsed and bank runs might have occurred in banks with operations far larger than their home economies. The thesis states that, in response, the EU decided to raise deposit guarantees, limiting banks from smaller economies operating in larger markets and potentially infringing the EU’s four freedoms. It argues that crises demand change and that Iceland is likely to seek quick EU membership to mitigate the fallout from the Icesave case.
[This abstract was generated with the help of AI]
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