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.

Ralph Steadman for the New Statesman.
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Tim Farron: Theresa May is "the prisoner of the Ukip wing of her party"

The Liberal Democrat leader on his faith, Blairism and his plan to replace Labour as the opposition. 

This is Tim Farron’s seventh general election. His first was in 1992, when his Tory opponent was a 36-year-old called Ther­esa May. He was just 21 and they were both unsuccessful candidates in the Labour fortress of North-West Durham. He recalls talking “to a bunch of ex-miners who weren’t best pleased to see either of us, some kid Liberal and some Tory”. Now he sees his former and current opponent as “the prisoner of the Ukip wing of her party . . . I think it has rendered Ukip almost pointless – she is Ukip now.”

May was elected to parliament in 1997, but it took Farron until 2005 to join her. She leads the dominant Conservatives while he heads a party of only nine Liberal Democrat MPs. Still, their reversal of fortunes gives him hope. “After the 1992 election, every­one said there’s no way for a non-Tory government, and it turned out there was. So let’s not assume it’s a given there’s a Tory government [for ever].”

In April, I accompanied Farron to Manchester Gorton, in the lead-up to a by-election that was cancelled by May’s decision to call a snap election on 8 June. Still, the 46-year-old’s party has been in campaign mode for months; Lib Dems spoke of using last December’s Richmond Park by-election to test their messaging. It clearly had an effect: the incumbent Conservative, Zac Goldsmith, lost to their candidate, Sarah Olney.

Brexit, to which the Liberal Democrats are vehemently opposed, will be a dominant theme of the election. Their party membership has just exceeded 100,000, close to an all-time high, and they have enjoyed much success in council by-elections, with more to come in the local elections of 4 May.

However, any feel-good factor swiftly evaporated when Farron appeared on Channel 4 News on 18 April. He was asked by the co-presenter Cathy Newman whether or not he believes that homosexuality is a sin, a question that he answered obliquely in 2015 by saying that Christianity started with acknowledging that “we’re all sinners”.

This time, he told Newman, he was “not in the position to make theological announcements over the next six weeks . . . as a Liberal, I’m passionate about equality”.

The Channel 4 interview divided opinion. One Liberal politician told me that Farron’s stance was “completely intolerable”. Stephen Pollard, the influential editor of the Jewish Chronicle, described it as
“a very liberal position: he holds certain personal views but does not wish to legislate around them”. Jennie Rigg, the acting chair of LGBT+ Liberal Democrats, said it was “as plain as the nose on my face that Tim Farron is no homophobe”.

Farron declined the chance to clarify his views with us in a follow-up phone call, but told the BBC on 25 April: “I don’t believe that gay sex is a sin,” adding, “On reflection, it makes sense to actually answer this direct question since it’s become an issue.”

For his critics, Farron’s faith and politics are intertwined. He sees it differently, as he told Christian Today in 2015: “. . . the danger is sometimes that as a Christian in politics you think your job is to impose your morality on other people. It absolutely isn’t.”

Tim Farron joined the then Liberal Party at the age of 16 but didn’t become a Christian until he was 18. Between completing his A-levels in Lancashire and going to Newcastle University to read politics, he read the apologetics, a body of Christian writing that provides reasoned arguments for the gospel story. “I came to the conclusion that it was true,” he told me. “It wasn’t just a feel-good story.”

In speeches, Farron now takes on the mannerisms of a preacher, but he had a largely non-religious upbringing in Preston, Lancashire. “I don’t think I’d been to church once other than Christmas or the odd wedding,” he says. “I went once with my dad when I was 11, for all the good that did me.”

When we meet, it is Theresa May’s religion that is in the spotlight. She has condemned the National Trust for scrubbing the word “Easter” from its Easter egg hunt, a row it later emerged had been largely invented by the right-wing press in response to a press release from a religious-themed chocolate company.

“It’s worth observing there’s no mention of chocolate or bunny rabbits in the Bible,” Farron reminds me. “When people get cross about, in inverted commas, ‘us losing our Christian heritage’ they mean things which are safe and comfortable and nostalgic.” He pauses. “But the Christian message at Easter is shocking, actually, and very radical.”

British politics is tolerant of atheists (such as Ed Miliband and Nick Clegg) alongside those who, like David Cameron, are culturally Christian but whose faith is “a bit like the reception for Magic FM in the Chilterns: it sort of comes and goes”. But the reaction to Farron’s equivocation on homosexuality prompted many to wonder if a politician who talks openly about his faith is now seen as alarming. Nebulous wishes of peace and love at Christmas, yes; sincere discussions of the literal truth of the Resurrection? Hmm.

Tim Farron’s beliefs matter because he has a mission: to replace not only Jeremy Corbyn as leader of the opposition but Theresa May in Downing Street. Over lassis at the MyLahore curry house in Manchester, he tells me that Britain is facing two calamities. “One is Brexit, indeed hard Brexit . . . and the other is a Tory government for 25 years. We have to present a genuine, progressive alternative that can not only replace Labour as an opposition, it can replace the Tories as a government.” This is ambitious talk for a party with nine MPs. “I understand the ridicule that will be thrown at me for saying those things: but if you don’t want to run the country, why are you in politics?” He pauses. “That’s a question I would ask most people leading the Labour Party at present.”

What does he think of May, his one-time opponent in North-West Durham? “She strikes me as being very professional, very straightforward, somebody who is very conservative in every sense of the word, in her thought processes, her politics, in her style.” He recalls her 2002 conference speech in which she warned Tory activists: “Our base is too narrow and so, occasionally, are our sympathies. You know what some people call us: the nasty party.”

“In many ways, she was the trailblazer for Cameron in being a softer-focused Tory,” he says. “It now looks like she’s been trapped by the very people she was berating as the nasty party all those years ago. I like to think that isn’t really her. But that means she isn’t really in control of the Conservative Party.”

Voters, however, seem to disagree. In recent polls, support for the Conservatives has hovered between 40 and 50 per cent. Isn’t a progressive alliance the only way to stop her: Labour, the Liberal Democrats, the Greens, the SNP and Plaid Cymru all working together to beat the Tories?

“Let’s be really blunt,” he says. “Had Jeremy Corbyn stood down for us in Richmond Park [where Labour stood Christian Wolmar], we would not have won. I could have written Zac Goldsmith’s leaflets for you: Corbyn-backed Liberal Democrats.

“I’m a pluralist,” he adds. “But any progressive alliance has got to be at least equal to the sum of its parts. At the moment, it would be less than the sum of its parts. The only way the Tories are losing their majority is us gaining seats in Hazel Grove –” he ticks them off with his fingers, “– in Cheadle, in the West Country and west London. There’s no chance of us gaining those seats if we have a kind of arrangement with the current Labour Party in its current form.”

What about the SNP? “Most sensible people would look at that SNP manifesto and agree with 99 per cent of it,” Farron says. “But it’s that one thing: they want to wreck the country! How can you do a deal with people who want to wreck the country?”

There’s no other alternative, he says. Someone needs to step up and offer “something that can appeal to progressive younger voters, pro-Europeans and, you know, moderate-thinking Middle England”. He wants to champion a market economy, strong public services, action on climate change, internationalism and free trade.

That sounds like Blairism. “I’m a liberal, and I don’t think Blair was a liberal,” he replies. “But I admire Blair because he was somebody who was able to win elections . . . Iraq aside, my criticisms of Blair are what he didn’t do, rather than what he did do.”

Turning around the Tory tide – let alone with just nine MPs, and from third place – is one hell of a job. But Farron takes heart from the Liberal Party in Canada, where Justin Trudeau did just that. “I’m not Trudeau,” he concedes, “He was better-looking, and his dad was prime minister.”

There is a reason for his optimism. “I use the analogy of being in a maze,” he says, “You can’t see a way out of it, for a progressive party to form a majority against the Tories. But in every maze, there is a way out. We just haven’t found it yet.” 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

This article first appeared in the 27 April 2017 issue of the New Statesman, Cool Britannia 20 Years On

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