Jóhanna Sigurðardóttir - extended interview

The Icelandic prime minister talks to the NS about scrambling to rescue an economy under pressure fr

Click here to see the interview as it appeared in this week's magazine.

How has your first year as prime minister been?
I have always worked hard, and seeing so many Icelanders make tremendous efforts to cope with difficult tasks and decisions inspires me to press for further reforms and to achieve concrete results. First, our aim is to revitalise the economy, balance the state finances and get troubled companies and families on their feet again. This cannot be done without facing the facts, identifying the reasons for the crash and determining who is responsible. Second, the government is taking decisions on law enforcement and changes in our governmental institutions in order to prevent a possible new meltdown in our financial system in the coming decades. Third, by reinforcing democratic processes, promoting better and more responsible governance and a reorganisation of the civil service, the government is opening a new path towards a better society, grounded in the ideals of the Nordic welfare state.

There is still a lot of anger in Iceland about the country's financial collapse. What are the next steps?
Feelings are mixed. Icelanders are both angry and full of sorrow and anxiety. They feel betrayed in many ways by the state, by the banks and by our allies. But the anger is also directed inwards - at ourselves as individuals and as a nation. Why did Icelanders let this happen? Sorting out those feelings will be a long and difficult process. This month, the findings of the parliamentary inquiry into the crash will be published and it's up to the Althing [national parliament] and the government to respond properly and in a trustworthy manner. An extensive judicial process into possible misconduct by financial institutions and other principal players is also ongoing. This will all take time but eventually the reckoning will take place and those suspected of misdoings will be prosecuted. At the same time, the government is pressing on with extensive reform of the financial markets and a radical restructuring of the civil service and the state institutions, in order to ensure that the collapse will not be repeated in the foreseeable future.

How is your relationship with Gordon Brown, given the disagreements over Icesave?
I met him briefly at the COP15 meeting in Copenhagen. We have exchanged letters and spoken on the telephone last week, and our officials have maintained contact. In our conversation last Tuesday, I explained the present situation in Iceland regarding the Icesave bill.

The Icesave bill, and the underlying agreement with Britain, was passed by the Icelandic parliament on 30 December, but the president of Iceland deferred the bill to a national referendum to be held less than two months from now. That is his constitutional right, albeit highly unusual usage of the presidential powers. Mr Gordon Brown was of course disappointed by this delay, but declared his will to continued co-operation with the Icelandic government concerning those difficult circumstances. He expressed the same sentiments regarding Iceland's EU bid, as Foreign Minister David Miliband also conveyed to Iceland's foreign minister, Össur Skarphéðinsson, last week.

Countries have interests and diplomacy is usually not personal, but many Icelanders feel that last year Prime Minister Brown went beyond what can be justified by the protection of British national interests. In addition, the application of anti-terror legislation against a peaceful neighbour and Nato ally is unprecedented. I am convinced that, in a similar situation, the government of the UK would not apply this particular legislation against a larger European country. All of this needs to be discussed openly, while we move forward in repairing bilateral relations.

Are you still seeking to discuss the Icesave issue with him face to face?
In my discussions with Prime Minister Brown, I declared myself ready to meet him if we [both] deemed it productive to clarify and mend the relations between our countries.

What do you expect the outcome of the referendum to be?
The national referendum is in accordance with Iceland's constitution, and that deserves to be respected both at home and in other democratic neighbour countries. I'm convinced that the Icelandic voters will reach the right decision and, on that basis, we will keep on with our recovery plan, hopefully in good co-operation with the international community. You don't contest the judgement of the voters in a democratic society.

Is the request that Iceland repay its bankers' debts reasonable?
Understandably, almost every Icelander finds it unreasonable that Icelandic taxpayers should have to pay thousands of pounds each for a failed private bank, because of mistakes the taxpayers had nothing to do with. But someone has to pay, and the question is really how this burden should be divided between the parties involved.

Iceland has always maintained that the EU regulation on depositors' insurance is flawed, in the sense that it doesn't have relevance in a system crisis where the financial institutions of a country crash at one go. The regulatory bodies of the Netherlands and Britain should also be held accountable for their faulty control of the Icelandic bank Landsbanki in their respective countries. Up to now, we have been pretty isolated in this view, but we will keep on speaking for our opinions on this issue.

If Iceland does not repay its bankers' debts, is there a risk that the country will become an international pariah?
The parliament and three successive governments have stated that Iceland remains committed to honouring its obligations. However, the Icesave case has been deeply contested in Iceland, given the enormous economic burden involved.

If you take into consideration Iceland's progress in 2009 in implementing the economic recovery programme supported by the International Monetary Fund, the prolongation of the conclusion of the Icesave issue is a certain setback. However, Iceland's fundamentals remain strong -- Iceland will recover. We stay in close contact with the governments of the UK and the Netherlands, Nordic and other partner countries, and with the EU and the IMF, in order to explain the issue and the next steps.

How will Iceland's economy change, post-crash?
In future, the Icelandic economy will be based on sustainable use of its fishing stocks and energy resources, and the ingenuity and strength of its well-educated, vibrant, young population. The economy will not return to the flammable combination of high leverage and unbridled risk-taking that drove us into the financial crisis we are now overcoming.

Our international competitive sectors, including tourism, have rapidly become more important over the past 12 months. These sectors will continue to be of high importance and push the economy onwards to rapid recovery. Most importantly, we are restructuring a more stable economy that is returning to its roots as a Nordic welfare state.

To this end, I put great faith in the EU accession negotiations that we hope will start in early 2010. Membership of the European Union and adoption of the euro would secure the already extensive success we have made in restructuring and rebuilding our economy.

What benefits would EU membership bring?
Our goal in the membership negotiations is to reach an agreement that is in accordance with Iceland's fundamental interests as defined by the Althing. Recent polls indicate that public opinion is divided about EU membership, but I expect the nation to approve an agreement if a solution is found regarding fisheries and agriculture. We have been members of the European Single Market for 15 years through the European Economic Area Agreement, as well as being members of the Schengen Agreement, and I believe that the benefits are appreciated in my country.

EU membership will build confidence as regards the future of the Icelandic economy and give a clear sign of direction. This is very important in the light of the circumstances. In addition, we would gain a voice within EU institutions and be able to rely on European solidarity. Prices of certain consumer goods should fall, and the EU's regional policy would be beneficial to the remote regions of Iceland.

Membership would also allow for adoption of the euro, which would reduce the costs we pay to maintain the world's smallest independent currency. We would expect less economic volatility, lower interest rates and funding costs closer to those enjoyed by other European economies.

Your economic "stability pact" received a mixed response from trade unions. As a former union organiser, do you still feel loyal to them?
Times in Iceland are hard for everyone and the trade unions feel the burden of accepting wage cuts, cuts in social expenditure and the rise in income taxes. Nevertheless, they are taking full part in stabilising the economy for the common good.

The trade unions participate in managing the pensions funds, which are fully funded by 10 per cent of the pool of wages each year, and they manage capital the equivalent of 150 per cent of GNP. These funds play an important role in Iceland, as they give us means to invest in large-scale infrastructure programmes, which will raise the employment level in the difficult times ahead. I have given my word on implementing the stability pact, and despite all obstacles I will do my best.

Your government is 50 per cent female. Is equality important to your vision for Iceland?
Definitely! My long experience in politics tells me that egalitarian policies are the best way to unite and empower people, and are also a necessary counterweight to the sometimes dividing and detrimental influence of market forces. A society that does not use the intellectual power of its female population fully is not a wise society. Women are now the majority of students in the Icelandic universities, and 43 per cent of our MPs.

We have to use all our resources to bounce back from the recession and we expect women to take their full part in the new era. Most women are not as tainted by mistakes in the conduct of the economy as the male population, and now they deserve an opportunity. We are determined to achieve gender equality in the political sphere but, unfortunately, the corporate side is still lacking. This is odd, because international research shows that companies with a sound gender policy are better run and more profitable than male-dominated companies. We are prepared to introduce legislation that would actively encourage the private sector to adopt a wiser and more effective gender policy.

By the way, it's not a coincidence that the World Economic Forum recently ranked Iceland first in its annual, 134-country survey of gender equality, followed closely by Norway, Finland and Sweden. We would like to keep that position!

You called for Davíð Oddsson, the former head of Iceland's Central Bank, to stand down. He now edits the Morgunblaðið newspaper. How do you feel about his current job?
It has become a quite common view that he has turned Morgunblaðið into a campaign organ for his own views, rather than a broad-minded newspaper on the right. His assignment is a decision the owners of Morgunblaðið have to stand by, and is not for me to comment on.

Iceland is already experiencing signs of climate change. What moves is your government making to combat it? How can those be reconciled with the need to focus on the economy?
The Icelandic government will soon publish its action plan for reducing greenhouse-gas emissions, recovering wetlands and increasing forestation. In Iceland, renewable energy has supplied 90 per cent of the primary energy needs since 1999 -- proportionally more than any other country. Geothermal sources are also used to heat 89 per cent of our buildings.

Our aim is to become completely energy-independent, using 100 per cent renewable energy sources. This will take time but makes ecological and economic sense.

Following the oil crises in the 1970s, Iceland turned geothermal, and this has led to great savings in the national economy. Some estimates say Iceland is saving as much as a year's national income every 11 to 12 years by virtue of that foresight.

Is there a plan?
A plan provides focus, but it is not an end in itself.

What would you like to forget?
I would like to remember all and be able to forgive everything -- in due course!

Are we all doomed?
Our time is limited, but the spirit is free.

Click here to see the interview as it appeared in this week's magazine.

© MARK PETERSON/REDUX/EYEVINE
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Goodbye to the Confederate flag

After the shootings in Charleston, the Republican right showed it was finally ready to reject the old symbols of the Confederacy.

On 27 June, an African-American activist named Bree Newsome woke up before dawn, put on her climbing equipment and scaled a 30-foot flagpole on the lawn of State House in Columbia, South Carolina. She then removed the Confederate battle flag that flew from it. “We can’t wait any longer,” she explained later in an online statement. “It’s time for a new chapter where we are sincere about dismantling white supremacy.”

After she was led away in handcuffs, the flag was raised again.

Newsome’s protest reflected a growing impatience within America’s black community and anger about liberal inaction. Political rallies by the Democratic presidential contenders Hillary Clinton and Bernie Sanders have been disrupted by the Black Lives Matter campaign against violence committed on young African Americans and the cultural and legal biases that justify it. While promoting his book on race in the US, the writer Ta-Nehisi Coates argued that, to African Americans, the battle flag represents a lingering attempt “to bury the fact that half this country thought it was a good idea to raise an empire rooted in slavery”.

Yet, on this matter, to everyone’s surprise, the black civil rights movement and many southern Republicans have proved to be of one mind. On 9 July the House of Representatives in South Carolina voted to lower the battle flag for good. It stood, representatives said, for racism. It had to go.

The context of this agreement was a painful one. Ten days before Newsome’s act, a 21-year-old white man named Dylann Roof shot and killed nine black worshippers at the Emanuel African Methodist Episcopal Church in Charleston, South Carolina. According to his room-mate, he wanted to start a race war. The TV screens showed a photo of him holding a gun in one hand and a Confederate battle flag in the other.

If the demands for redress made by civil rights groups didn’t come as a surprise, conservative acquiescence did. The Republican Party had built a solid base in the South by courting white voters who cherished the memory of the Confederacy. Yet the party’s presidential hopefuls from both the North and the South – including Jeb Bush, Lindsey Graham, Scott Walker and George Pataki – said that the battle flag ought to be lowered. The most striking intervention was made by the governor of South Carolina, Nikki Haley, who denounced the use of the Confederate flag and signed the bill removing it. Haley is now tipped to figure on the list of potential vice-presidential nominees.

The volte-face of the US right is in part a result of the horror of the Charleston shootings. Yet it also occurs in the context of major shifts within American society. There are still many conservatives who will defend Confederate heritage as a matter of southern pride but the culture wars are changing as the US becomes increasingly European in outlook. This is taking place across the country. It just happens to be more pronounced in the South because no other region has fought so violently and so long to resist the liberal tide.

The story of the battle flag is the story of the South. The first official Confederate flag used in the civil war of 1861-65 caused confusion during fighting – through the haze of gun smoke, its design of 13 stars and red and white bars was hard to distinguish from the Stars and Stripes. An alternative blue cross was rejected for being too sectarian; the racist Confederacy was anxious not to offend its Jewish citizens. So the cross became a diagonal X. This flag was never officially adopted by the Confederate army. In the years after the war its use was infrequent.

There was little need to visualise southern difference in a flag. It was self-evident in the physical signs of racial segregation: separate schools, pools and drinking fountains; black people confined to the back of the bus. Political displays of the battle flag of Dixie (the historical nickname for the states that seceded from the Union) only really resurfaced when that racial order was challenged by northern liberals. In 1948, the Democrats – then the party overwhelmingly in control of the South – split over modest calls for civil rights. The conservatives who refused to support that year’s presidential ticket, the “Dixiecrats”, triggered a rev­ival of flag-waving across the region.

The old battle flag suddenly appeared on private lawns, on cars and at political rallies. Supposedly ancient cultural traditions were invented overnight. For instance, the 1948 student handbook of the University of Mississippi confessed: “Many Ole Miss customs are fairly new; they lack only the savouring which time brings . . . Ole Miss has adopted the Confederate flag as a symbol of the Mississippi spirit. Each football game finds the scarlet flag frantically waving to the rhythm of the Rebel band.”

I can confirm that this “tradition” was still going as recently as in 2005. That year, I attended an American football game at Ole Miss and was surprised when the band played “Dixie” at the end. White boys and white girls stood up and belted out the folk song of the Confederacy, while black students filed out.

In 1958, South Carolina made it a crime to desecrate the battle flag. Three years later, on the 100th anniversary of the outbreak of the civil war, it was hoisted above its Capitol building in Columbia. That day, there was a struggle in the US Congress to keep federal funding going for segregated schools.

So clear is the link between the postwar white resistance to civil rights and the battle flag that many see it as the symbolic equivalent of the N-word. Jack Hunter, the editor of the conservative website Rare Politics, says: “Some people insist that it’s not about racism, not about slavery, not about segregation. But it’s about all those things.” Hunter grew up in Charleston and used to skateboard in the car park of the church that Dylann Roof attacked. When he was a young journalist, he appeared on local radio as a rabidly right-wing masked character called “the Southern Avenger”. His past was exposed in 2013 while he was working for Rand Paul, a Republican presidential candidate, and Hunter stepped down from his position. He publicly renounced his youthful association with racial conservatism. He now eschews any romanticism about the Confederate cause and its demand for states’ rights. “States’ rights to do what?” he asks: the right to discriminate against African Americans? He is glad that the State House flag is gone. He ascribes its longevity to ignorance, which was corrected by Roof’s rampage: “It was the first time that [southern Republicans] were able to see a different perspective on this symbol.”

Not everyone agrees. Richard Hines – a former South Carolina legislator, Reagan campaign state co-chair and senior activist with the Sons of Confederate Veterans – insists that the flag is “an enduring symbol of the southern fighting man”. Indeed, a poll in July found that 57 per cent of Americans think it stands for southern heritage, rather than racism. Yet that heritage has a political dimension. “Southern people are proud of who they are and there is a leftist assault to destroy the best part of America,” Hines says. “The Trotskyite elite in control of the establishment wants to root out the southern tradition” – a tradition of religious devotion, chivalry and military honour. It is possible to cast the battle flag as a pawn in a much larger cultural conflict.

In 2000, civil rights activists lobbied hard to get the battle flag removed from the top of the South Carolina Capitol and succeeded in having it shrunk in size and relocated to the grounds of State House. The issue came up in that year’s Republican presidential primaries – an unusually poisonous contest between George W Bush and John McCain. Supporters of Bush put out a false story that McCain had fathered an interracial child out of wedlock. McCain added to his woes by opining that the battle flag was “a symbol of racism and slavery”. An organisation called Keep It Flying flooded the state with 250,000 letters attacking him and he lost the crucial competition here to Bush.

The battle flag has retained a strong emotional power for a long time. This makes the Republican establishment’s abandonment of the flag all the more surprising. Then again, those who run the South are probably the people most likely to grasp how much the region has changed in just a decade.

***

In 2010 I took a trip through North Carolina. The landscape told a story. Dotted along the roadside were abandoned black buildings, the old tobacco sheds. The decline of the rural economy had rendered them obsolete. Over the fields that would once have been full of farmers were freshly tarmacked roads, stretching out to nowhere. My guide explained that these were supposed to be cul-de-sacs for new houses. North Carolina was going through a property boom. But who was going to buy all those homes, I asked? The answer: damn Yankees.

Demography is destiny. This once agri­cultural region developed fast from the 1960s onwards by keeping union membership, taxes and regulation as low as possible. Yet capitalism proved disastrous for southern conservatism. Northerners flooded in, seeking work or retirement and bringing their own values. The forecast is that North Carolina’s Research Triangle – the South’s Silicon Valley – will grow by 700,000 jobs and 1.2 million people in two decades.

White migration was accompanied by an influx of Spanish speakers as the service sector flourished. Between 2000 and 2010, the white share of the population of North Carolina fell from 70 to 65 per cent. The black proportion remained at roughly 21 per cent. The Latino proportion, however, jumped from 4.7 per cent to 8.4 per cent. Today, the proportion of people who are non-white and over 60 is about a third. But it’s approaching nearly half for those under 18. As a result, politics in the South is no longer biracial: a contest between white and black. It is increasingly multiracial and uncoupled from the region’s complex past.

The impact of these changes is reflected in voting patterns. In 2000, the South was still overwhelmingly Republican in presidential contests. Even the Democratic nominee, Al Gore, a southerner, lost his home state of Tennessee. But in 2008 and 2012, Barack Obama took those states with the fastest-changing demographics: Florida and Virginia. He won North Carolina in 2008 and lost it in 2012 – but by less than 100,000 votes. It is true that the Republicans won back control in the 2014 midterm elections, with the result that the Deep South now sends few Democrats to Congress; but the region’s political masters are not quite as traditional-minded as they once were.

The Republican relationship with the Confederate past is complex. As the party of Abraham Lincoln and the Union, the GOPs’ southern support was historically small. But in the 1960s the national Democratic Party embraced civil rights and alienated its once loyal southern following; the Republicans took the opportunity to steal some conservative white voters.

The growing southern Republican vote had a class component. Its success in local and congressional races was built more on winning over middle-class moderates than on appealing to the working-class racists who filled the ranks of the Ku Klux Klan. The southern Republican Party did enthusiastically embrace the Confederate battle flag in many quarters. But some office-holders did so only with ambiguity, while large sections of the party never identified with it at all. The period of Republican ascendancy in the South was, in reality, linked with a softening of the area’s racial politics.

Two of the Republicans’ current southern stars are Indian Americans: Bobby Jindal, the governor of Louisiana, and Nikki Haley, the anti-flag governor of South Carolina. There are just two black people in the US Senate and one of them is a Republican, the Tea Party-backed senator for South Carolina, Tim Scott. Marco Rubio, the Floridian senator and presidential candidate, is Cuban American, and the former Florida governor Jeb Bush is married to a Mexican-born woman and speaks fluent Spanish. Bush has tried to push a more moderate line on immigration, in deference to how the GOP will struggle to win the White House if it appeals only to angry white voters. The Kentucky libertarian senator Rand Paul, Jack Hunter’s former boss, has called for legal reforms to correct the trend of keeping far more black than white people in prison. And he is not the only Republican to have been moved by recent race riots sparked by police violence.

***

Violence on the streets of Ferguson, Missouri, and Baltimore, Maryland, confirmed that there still is a culture war in the US. Yet its character has changed. In the past, civil disturbances were typically leapt upon by conservative politicians as evidence of social decline. The 1992 LA riots were blamed on single parenthood and rap lyrics. In contrast, conservative leaders today are far more likely to acknowledge the problems of white racism. There is no place in their ranks for the likes of Dylann Roof. White supremacists are tiny in number.

Jack Hunter claims: “The KKK is like 12 guys in a telephone booth. Liberal groups will use their threat for fundraising but it doesn’t exist. It hasn’t properly since the 1960s.” Roof’s actions say more about gun control, mental illness and the angst of the young than they do about popular, largely liberal views on race, as polling shows.

We can see a similar liberal shift in other areas of the historic culture war. In May 2015 Gallup released the results of a “moral acceptability” survey charting changes in national attitude across all age groups, from 2001 to 2015. Approval of gay relationships jumped from 40 to 63 per cent; having a baby out of wedlock from 45 to 61 per cent; sex between unmarried men and women from 53 to 68 per cent; doctor-assisted suicide from 49 to 56 per cent; even polygamy went from 7 to 16 per cent. Abortion remained narrowly disapproved of: support for access has only crept up from 42 to 45 per cent. This is probably a result of an unusual concentration of political and religious opposition and because it involves a potential life-or-death decision. But the general trend is that young people just don’t care as much about what consenting adults get up to.

Why? It might be because old forms of identity are dying. One way of measuring that is religious affiliation. From 2007 to 2014, according to Pew Research, the proportion of Americans describing themselves as Christian fell from 78 to 71 per cent. Today, only a quarter of the population is evangelical and 21 per cent Catholic, down despite high immigration. Then there is the decline in civic or communal activity. Since 2012, the organisers of Nascar, the stock-car races, have not published attendance figures at their tracks, probably because they have fallen so sharply. The decline of this most macho and working class of sports parallels the fall in conservative forms of collective identity such as southern traditionalism.

The old culture war was, like the racial politics of the old South, binary. In the 1950s, around the same time as the South invented its tradition of flying the battle flag in colleges, the US constructed an ideal of the “normal” nuclear family unit: straight, white, patriarchal, religious. On the other side was the “abnormal”: gay, black, feminist, atheist, and the rest. The surest way to get elected in the US between 1952 and 2004 was to associate yourself with the economic needs and cultural prejudices of the majority. The approach was once summed up by a Richard Nixon strategist thus: split the country in two and the Republicans will take the larger half. But that is changing. The old normal is no longer the cultural standard but just one of many identities to choose from. The races are mixing. Women want to work more and have children later in life, possibly without marriage. Many religious people are having to rethink their theology when a child comes out as gay. And the enforcers of the old ways – the unions, churches or political parties – are far less attractive than the atomising internet.

***

Politicians are scrabbling to keep up with the diffusion of American identity. Democrats got lucky when they nominated Barack Obama and chose a presidential candidate who reflected the fractured era well: interracial, non-denominational Christian, and so on. In the 2012 presidential race the Republicans got burned when they tried to play the old culture war card on abortion. They won’t repeat that mistake. After the Supreme Court legalised gay marriage across the country in June, the right’s response was not as uniformly loud and outraged as it would have been in the past. Some protested, but serious presidential contenders such as Jeb Bush grasped the implications of the defeat. There is a cultural and political realignment going on and no one is sure where it will lead. It’s encouraging caution among the Republican top brass. It is time, they think, to abandon lost causes.

The death of southern traditionalism is part of the ebb and flow of cultural history. Identities flourish and die. As political fashions change, you find the typically American mix of triumph on one side and jeremiad on the other. Richard Hines stood vigil as the battle flag was lowered in Columbia and noted with disgust the presence of what he described as “bussed-in” activists. “They pulled out all these gay pride flags and started shouting, ‘USA, USA, USA!’ It reminded me of the Bolshevik Revolution.”

Hines reckons that more southerners will now fly the flag than ever before and says he has attended overflow rallies of ordinary folks who love their region. He may well be correct. The faithful will keep the old Confederate standard fluttering on their lawns – an act of secession from the 21st century. But in the public domain, the battle flag is on its way down and in its place will be raised the standard of the new America. The rainbow flag flutters high. For now.

Tim Stanley is a historian and a columnist for the Telegraph

This article first appeared in the 20 August 2015 issue of the New Statesman, Corbyn wars