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Address by the Prime Minister of Iceland H.E. Ms. Jóhanna Sigurðardóttir 17 June 2012



My Fellow Icelanders,

Today we join together in celebrating our national day, an important anniversary in the life of our country.

It has been a great pleasure to sense the change of season and its effect on our lives over the past few weeks. We have had good weather, day after day, throughout the country. It is always a wonderful experience, as the land is clothed again in spring growth, to see people, young and old, enjoy outdoor life and sunshine.

This is a time of strenuous activity for the farmers as they use the good weather for outdoor work, though rain is no less precious than sun for them.

Now, as we enter perhaps the most beautiful time of the year, with the longest days and the wonders of nature in full view, it is natural that we should feel pride in the beauty of our country.

In his poem ‘Iceland', Jónas Hallgrímsson asked a question that has perhaps never been more relevant than now:
‘Can we be proud of our progress, pleased with the course we have taken?'

What is the situation now in Iceland, nearly four full years since we found ourselves faced with the most serious economic crisis since independence, with the possibility of national bankruptcy and international isolation?

No wonder my predecessor in the office of Prime Minister asked for God's blessing on Iceland, faced as it was with such a terrifying prospect at that time. The problem seemed virtually insurmountable.

In my address on the national day three years ago, I voiced the hope that the turmoil that followed the collapse would be short-lived and that it would be remembered chiefly because the nation did not falter in its purpose.  That we would made a success of tackling the new struggle for our economic independence; that we would learn from our experience and manage to build a better Iceland, one that was fairer, more honest, juster and more egalitarian.

Looking back now, I think it fair to say that in many ways, my hopes have been realised. The Icelandic people have demonstrated incredible strength, stamina and determination and have risen to the challenges successfully.

National bankruptcy has been avoided. Together, we have defended our welfare system, our resources and our natural environment and Iceland has been saved from international isolation. At the same time, we have re-examined and improved many of the fundamental elements in our society; we have learned from experience and have begun a determined drive towards a better standard of living.

In just a few years, the basis has been laid for a new and better society in Iceland, one with more financial equality, greater social justice and healthier rules of the game than we had before the crisis.

In terms of greater equality, the fact is that we have achieved far more than I allowed myself to dream of when I stood here three years ago.

While the economic upheaval we have been through was in many ways more serious than other countries in our part of the world had to deal with, it is notable that the main bite of the recession here was relatively short-lived, though it was felt painfully and in many areas.

For two years now, the situation in Iceland has been improving, and our recovery has been considerably larger than that in most of the countries with which we usually compare ourselves. It is clear to me in my meetings with leaders abroad that they are watching with interest the positive developments that have taken place here since the crash.
The results can be seen clearly.
The fiscal deficit has been brought under control and the national debt is being steadily reduced.

The emergency loans we took are being paid off more quickly than was expected, and the Treasury has taken deliberate steps to give institutions and companies in Iceland access to foreign credit markets.

Some agreements have already been made on foreign investment for business development in Iceland, and others are being prepared.

We have broken our way out of isolation and regained trust to a substantial extent.

We can be proud that, compared with the lowest point of the recession,the national economy has grown by nearly 11%,
 - the number of people without work has fallen by more than 30%,
 - household debt has been substantially reduced
 - and the purchasing power of wages has grown steadily. Only once in the past
  thirteen years has the purchasing power of wages risen more than it has in the
  past 12-13 months.

The best news, though, is that there is every indication that the general standard of living will continue to rise as it has done over the past two years. During this period, the proportion of people who consider themselves as doing well, economically, has almost doubled to nearly 70%, with a corresponding reduction in the number of people who are struggling or feeling the pinch has fallen correspondingly.

Also, extensive changes have taken place in our society – changes that will be of immense importance in the long term.

I should like to mention a few examples.

There has been a complete transformation the distribution of income in the direction of greater equality.

Few western countries had witnessed anything like the growth in inequality that Iceland experienced in the years before the crash. Most of us had the feeling that part of our community had actually begun to live in a completely different world from the rest of us.

Much of this imbalance has now been swept away, and Iceland has once again joined the group of the world's richest countries with the greatest degree of equality in terms of income.

The same can be said of gender equality. Iceland has come out in first place in the world in the world over the past three years in this respect, with further progress being made every single year.

Women now form a majority in the cabinet for the first time, and about 40% of MPs and half of the permanent under-secretaries in the ministries are now female. Women have served in most of the senior public positions in Iceland, and later this month, for the first time in our history, a woman is to be ordained Bishop of Iceland.

Women have also broken the barriers into other leading positions in society and in business, and gender-based wage differentials have been steadily reduced in recent years, though much still remains to be done in that area.

Environmental affairs and natural resources have also undergone a complete review in recent years. Various steps have been taken to ensure that control over these resources, the most valuable communal assets that we have in Iceland, and the right to benefit from their utilisation, will rest with the Icelandic people, and not only during our lifetimes but also, and perhaps more importantly, for the benefit of future generations.

It is planned to submit draft legislation to the next session of the Althingi on the ownership of water resources and the overall supervision and the levying of fees on nationally-owned resources. It will include provisions on the creation of a natural resources fund.

I also trust that the present session of the Althingi will go ahead and pass legislation to ensure the nation the fair dividend on its fisheries resources for which it has striven for so long. This dividend could amount to tens of billions of krónur in the years ahead in times of good catches such as we have had in the past few years, at the same, the new law securing a favourable environment for well-run companies. This important issue must not be derailed.

Straight away next year, we will see this resource dividend put to use in the government's investment programme, resulting in additional economic growth and a significant number of new jobs.  Extensive projects will be put into practice to improve transport and communications in the rural areas and to develop social infrastructure and create a broader-based economy to meet the demands and requirements of future generations.

One of the most important tasks facing governments, and politicians, at any given time, is to prepare the ground for future generations. Our new investment programme certainly does this, with increased priority given to science and research, the development of a ‘green' economy, innovation and creative occupations.

We are also about to see the completion of the largest structural changes in the government ministries in the history of the Republic. The number of ministries will have been reduced from twelve, as it was when this government took office, to eight.

Many people believe that ministers should give up their seats in parliament when they take up their portfolios. The reduction in the number of ministries, and the expansion of the number of portfolios covered by each, certainly opens the way to putting this idea into practice.  I am of the opinion that his radical change would strengthen parliamentary government in Iceland, and I call for serious attention to be given to the idea.

While many aspects of our reconstruction work since the crash have gone better than we could have expected, there is still a lot of unresolved anger in society, and the political process is coloured by bitter confrontations – more bitter than I ever saw previously in my 34 years as an MP and a minister.

We can see the consequences of this, for example, in a profound lack of faith in many of the most important cornerstones of our democratic society, in greater scepticism regarding politics and the established political parties and diminished respect for the Althingi, the government, the opposition and many of the key social institutions.

Of course some ups and downs in confidence are only natural, and not least when it proves necessary to take difficult and unpopular decisions, but permanent dissension and a lack of confidence in the fundamental institutions of our society, such as we have experienced ever since the crash, is a cause for great concern.

We, the elected representatives of the nation, all bear responsibility for this, and to a large extent we have failed in the important task of earning the nation's trust anew.  I deplore this state of affairs, we must improve our record on this point over the next year or two if we are to avoid serious consequences.

Notwithstanding a few amendments and attempts at complete revisions, Iceland's constitutional structure is still largely based on the constitution which King Christian IX granted us in 1874.

Now, at last, it seems that the vision cherished by Jón Sigurðsson and others at the ‘national meeting,'[in 1845] and shared by many ordinary people in Iceland ever since the beginning of the independence campaign for a new, all-Icelandic constitution, may become a reality.

Tens of thousands of Icelanders played a role in formulating the proposals that were approved unanimously by the Constitutional Council, a body of 25 representatives elected by the nation as independent candidates.

Many people, lay and learned, put a huge amount of work into these proposals, and in my opinion their efforts have not received the general recognition they deserve.

A year ago, I expressed the view that it was both symbolic and appropriate that the Althingi should demonstrate its courage and democratic responsibility by holding a referendum on what is to be done in the future with the product of this important work.

Parliament has now made its will clear and agreed to hold a referendum on whether the Constitutional Council's proposals should be adopted as the basis of a new constitution for Iceland.

This important referendum is to be held later this year.

It is vital that a programme of public awareness-raising be started in the weeks ahead to explain the substance of the Constitutional Council's proposals so that people can make an informed choice when they vote in the referendum.  If the nation so wishes, then the first truly Icelandic constitution could take effect as soon as next year, perhaps on the national day, 17 June 2013.

Today, our national day, is an ideal time to pause and consider where we stand and where we are heading. We should call to mind periods of progress in our history and take pleasure in our nation's good achievements.  We should also face the reality of our failures, and draw lessons from them. This is our duty, not least towards our children and future generations.

On all sides, Iceland's future is bright and the opportunities we have here are virtually inexhaustible. We are the most peaceful country in the world, and surveys by international bodies reveal that some of the highest levels of gender equality, social justice and general welfare are to be found here. Our energy resources are becoming ever more precious, and the same applies to our invaluable unspoiled landscapes and other bounties of nature.

But our most valuable resource lies in our people themselves, as has been demonstrated so clearly in recent years.

The self-image we cultivate, as individuals and as a nation, and the attitudes we adopt, will be the most decisive factor in how we fare in the long term.

As the poet Stephan G. Stephansson said: ‘To a great extent, prosperity resides within us all.'

If we combine our efforts and aim at progress, we should have everything it takes, as a nation, to achieve miracles, small and large.

My best wishes to you all.


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