CRISIS IN ICELAND APRIL 2016. WHY PEOPLE CRY ALOUD: “TORTOLA GOVERNMENT GO HOME“

 

The political crisis that Iceland is living now reflects the revolt of the civil society after 3 years of ruling of a governmental coalition (Progressive Party and Independent Party) that is perceived to have protected a ruling oligarchic elite in order to rebuild Iceland after the crisis with the motto: “business as usual“.

These are the voices heard in the streets of people protesting. “We want new elections: they all have to go“.

But wait a minute: Why is this government so impopular if macroeconomic data is positive and all seemed going in the right direction?

First of all, lets not forget that the leader of the Independent Party and the number 2 of the same party are also affected by the Mossack Fonseca disclosure of information. They are Ministers in the Government and have lost all creditibility. We have therefore a trio of top politicians at the epicenter of the worldwide tsunami of corruption.

But this crisis is not only due to the Panama leak scandal. Here is a short list of facts pointed by protestors and civil society leading to the resignation „de facto“ of Prime Minister Sigmundur Davið Gunnlaugsson and the constitutional crisis that Iceland goes through today.

Actions taken by Government during the period 2013-2016 that have created indignation among voters:

• After taking office, lowering taxes (fish licences) on the fishing industry but imposing austerity measures on the public budget (education, health, social policies)
• Stopping, derailing and watering down the constitutional reform (new constitutional project voted in a national referendum on 20 October 2012 and approved by 66% voters with a participation of almost 50%)
• Watering down the clause approved by more than 80% voters in October 2012 according to which natural resources had to be constitutionally protected as a collective good of the nation and be exploited at a fair market price for the benefit of the whole society.
• Ignoring the Parliamentary procedure, the promise of a referendum done to voters and sending unilaterally a letter to the European Union putting an end to the accesion of Iceland to this supranational organisation in the spring 2015 (+ 53.000 people protested against it and asked for the promised referendum)
• Putting the health system at the edge of collapse (in spite of more than 85.000 signatures urging Government to dedicate proper budgetary resources to health) and planning for a partial privatisation in spite of 80% public opinion that wants a public sector
• Selling companies to families of political leaders under market prize (ie. recent Borgun scandal Involving Minister of Finance).
• Ignoring the needs of the tourism industry, giving this sector special VAT regime and failing to protect a fragile environment/landscape under stress of millions of visitors
• Using public budget to rescue private-debtors in 2015 (households affected by price-indexed loans which doubled after the crisis)
• Failing to attact the real cause of the credit market and housing problem (indexation of credit to inflation ex-post contrary to European consumer credit law (as confirmed by EU and EEA institutions such as European Commission, EFTA Surveillance Authority and EFTA Court)
• For the former Prime Minister, offering a solution to creditors trapped in Iceland due to exchange currency controls while being married to one of them (Wintris company registered in Tortola). Keeping this information secret in spite of rules on transparency adopted by Parliament. Claiming all taxes are paid in Iceland on that company knowing the Icelandic tax authorities cannot obtain financial information from Panama.
• Defending the Icelandic króna (ISK) as the best monetary currency for Iceland while enjoying all money abroad in hard currency (dollars/eurs) (taken out before the financial crisis on the basis of priviledged information and thus avoiding 60% collapse of its value vs. euros from October 2008). Hiding this from the general public.
• Creating a housing buble encouraging foreign investment through Central Bank auctions - buying the ISK with a 20% profit (money owned by Icelanders abroad)
• Planning to go ahead with privatisation of public owned bank Landsbankinn
• Planning a future amnesty for money returning from tax havens
• The list is long and will be completed very shortly with input from other Icelandic contributors.

So here is the conclusion. The Government indeed can claim a set of good economic policies and good performance but people do not seem to care about economic data anymore. It is all about corruption, honesty, fairness, redistribution of wealth and social justice. Unfortunately citizens perceive all these policies as decisions of a corrupted set of leaders with no ethics, protecting their own millionaire interests and business class. The Panama papers provide furthermore the evidence that was missing. A substantial majority of people believe now that the money from the failed Icelandic banks did not evaporate in the air, as we were told by those at the top...... On the contrary, they think that it is very well secretly hidden in the Caribbean. All leads to a perception of intolerable corruption, while the owners of those opaque secret companies walk around the streets of Reykjavík they enjoy for free all public services that are financed by tax voters and ordinary citizens...

This double standard explains the anger in the streets and the slogan “Tortola Government: go home“

A view of Iceland in April 2016: an ongoing clash between legality vs. legitimacy

The promise of constitutionalism rests on a “great modern fallacy” (as the Swiss historian Jacob Burckhardt called it) according to which citizens can rationally and deliberately adopt a new constitution to meet their needs and assent to a social contract. While a Constitution is obviously for the people, not a single one has never been written by “we, the people“ but rather by some “founding fathers“. In the history of comparative constitutionalism, Iceland has showed how this fallacy may one day come true. And that is why constitutional experts from around the world follow this process very closely.

But what is really happening in Iceland transcends the promise of a new constitution. Put in simple terms, what we witness is a process of destitution/deconstruction of a legal order and a revolutionary upheaval or call for constitution/reconstruction of a radically different one. Sociologists and social scientists know well how progress is not linear as history advances in waves or tides of reform followed by impasses or even regressions. In 2016, Icelanders seemed trapped between constitutional upheaval (calling for the enactment of the constitutional draft voted on October 2012) and continuity (deciding by political consensus on the reform of three selected issues).

What is important to signal, however, is that the new constitutional legal order that many citizens asked for after the crisis reflects a fundamental change of paradigm and is not well understood by the ruling political elite. It is a democratic call to provide legitimacy to the constitutional text following Rousseau´s ideal (who required the assent of all to the original social contract). For a new generation of citizens, the main concern is to provide for legitimacy through universal participation in constitutional and law making rather than secure stability or preserve the political status quo.

This call coming from the people challenges the legal reality in a way difficult to explain to those not familiar with legal philosophy. The validity of Icelandic legal system is based on a double test which can be summarized in two words: legality (formlegt lögmæti) and fairness/fundamental rights (réttmæti). This is typical in a positivist legal order. In continental Europe, on the contrary, (ie. Spain, France, Italy, Germany) the legal theory requires a third pillar for the law to be validly formulated, adopted and recognized as such: legitimacy (efnislegt lögmæti). This is requirement that the law is initially and subsequently consented by the people and that it is also good for the people. Reasons for the different legal theory are historical. As European constitutions were redrafted in the aftermath of wars, a departure from positivism was necessary. After lenghly debates a triple test was conceptualized and adopted bringing a third factor into the formula: law = legality + fairness + legitimacy (Radbruch, “Five Minutes of Legal Philosophy”, Oxford Journal of Legal Studies 1945 reprinted 2016 and Pattaro and Iturmendi Morales, Filosofía del Derecho 1980). In this formula none of these concepts is more important than others, a balance is reached case by case but all three must be there for the law to respect the so called “rule of law“.

We are now at the crossroads where we witness a confrontation between legality and legitimacy as opposing values. A substantial part of the society dares to rejects laws (or even Constitution) originally drafted and later interpreted by an elite. The society is polarized. There is a deep mistrust on the parliament (Althingi). The fiction of the ultimate validity of the current constitutional text looks like a broken mirror. More and more citizens and some political parties question the natural supremacy of “the law of laws“ based on formal aspects and excluding its content. They simply reject the thesis of a hierarchical pyramid where the authority of the supreme norm is self-justificated and tautological but the people is excluded. They reject legality as an exclusive and excluding theory. Drawing on Carl Schmitt, they argue that the constitution has a superior value not by its formal aspects nor by constitutional history but by the fundamental decision of the people (the real constituent power) and by virtue of the supreme value of its content.

This call for “legitimacy“ is a deep revolutionary legal claim that challenges the current status quo and is not yet conceptualized. This word does not exist as such in Icelandic legal language as scholars considered the consent of the people to be relevant for the political science. As reality nevertheless has proved, Icelanders have understood very well the importance of the concept in practice since they could reject in two referenda (Icesave 2010 and 2011) a legislative act adopted by their Parliament. In a parallel way, the collection of signatures requesting different petitions to the authorities is stronger than ever (the last petition to invest in the publich health sector is by far the largest with more than 85.000 signatures in 2016). Rather than ignoring this deep call for reform, I will argue that it is better to formulate the legitimacy demand and ground it to the proper legal theory with a view to ameliorate the current debate. For this reason, I would like to propose a new trio of words that may be useful to formulate the concepts and resulting theory that is requested by many citizens. In Icelandic common language we could resume it in a simple formula: Lög/Stjórnaskrá = lögmæti + réttmæti + „þjóðmæti“.

This formula reflects obviously the view of a new generation who wants a radical change of society. It means the end of an era where citizens were happy to leave government and constitutional matters in the hands of the governing class. It is a deep call for more democracy, true representation beyond elections and real accountability of the political elite. A new political reality emerges. Sovereignty is not conceived as an authority that the people permanently transfer and alienate to an external entity (Parliament) but rather as a supreme and inalienable right of the people that is delegated to representatives who are then accountable for it in a permanent basis. The legitimacy is not only given every four years through elections but is to be won day by day. In this perspective, the call is for the supreme power and authority of the Parliament to be limited and counterbalanced by citizens/civil society. It means a new political and legal order. This should not surprise us after all since State authority in a modern democratic society is constantly limited in the name of human rights and/or supranational/international entities that rule over economic issues (EU Treaties or EEA agreement).

The claim for legitimacy to be part of the (constitutional) legal order has been formulated by society, it just needed a proper name/concept („þjóðmæti“ in common language but „efnislegt lögmati“ for legal experts) and supporting legal theory. A debate is now necessary to argue pros and cons of this approach and work towards +democracy. Whether we see constitutional upheaval or continuity is still to be seen. At the end of the day, only history will tell whether this other continental vision of law and a new constitutional making that really includes the citizens prevails or not in Iceland.

 

This article has been published in Icelandic in the journal STUNDIN on 23 March 2016, I thank Ólöf Pétursdóttir for an excellent translation.

http://stundin.is/pistill/logmaeti-og-thjodmaeti/

 

PS. The critique of formal supremacy and legal positivism is obvious when Schmitt paraphrases Kelsen: “A law “is valid when it is valid and because it is valid”. CARL SCHMITT, CONSTITUTIONAL THEORY (Jeffrey Seitzer ed. & trans., Duke Univ. Press 2008) (1928).