Prime Ministers Address to the nation on June 17, the National Day of Iceland

Fellow Icelanders.

Iceland’s National Day, the 17th of June, holds a special place in the hearts of Icelanders. On this day, when the sun is close to its zenith and the day at its longest, Icelanders gather throughout the country and in many locations around the world, to recall those victories which a small nation achieved on the road to greater freedom and better lives. On this day the generations, not least children and youth, celebrate together the future of our nation. The establishment of the Republic of Iceland on this date 65 years ago confirmed Iceland’s victory in becoming a sovereign and independent nation.

The struggle for independence, however, was not over on that day and many more victories, which have reinforced our independence, have been won since then. Probably the most significant milestones along that route were the victories in disputes for jurisdiction in coastal waters, which concluded with our exclusive and unlimited control over the marine resources and ocean floor up to 200 nautical miles from the coast. The struggle for independence was the incentive which spurred us onward from poverty to plenty. This struggle continues, and it could be said that today, on the 17th of June 2009, we are once more fighting a new independence struggle. A struggle that no one dreamed we would encounter.

In the middle of an international crisis

A year ago, storm clouds had gathered on financial markets and darkened the economy of the world’s nations. The global credit crunch had set in and international financial institutions of long standing found themselves in major difficulties. The credit crunch would prove to be one of the deepest and most serious the world has encountered and its consequences can be described as an economic catastrophe. When the tidal wave hit with full force last autumn in America and Europe, the foundations of Icelandic financial institutions collapsed and the commercial banks became insolvent in the space of a week.

The blow to Iceland was greater than anyone had imagined. Icelandic “expansion entrepreneurs” had travelled far abroad on a binge of greedy commercial conquest which left behind smoking ruins, not only in Iceland but also abroad. Faced with this situation, our government and regulatory institutions failed to fulfil their enforcement role with sufficient rigour. Everyone knows the consequences for the economy and households in Iceland. During the past few months we have stood in the ruins, performed rescue work, and begun the clean up.

Most of the decisions which now have to be taken are more difficult and regrettable than words can describe. The decision to conclude an agreement concerning the obligations which we bear as a result of ICESAVE accounts is extremely difficult but unavoidable. It must be borne in mind that all the EU states, including our staunchest allies, are unanimous in their view that the Icelandic state is responsible for the obligations involved. Legal opinions also indicated that there was no possible route to have the dispute resolved in court without the approval of all parties. To unilaterally reject these commitments could have very serious consequences. It would mean a real danger of Iceland becoming isolated internationally, of markets closing and financing possibilities disappearing. That would cause unforeseeable long-term damage to both the people of Iceland and the economy.

At the same time, I want to emphasise that it is absurd to maintain, as some have claimed, that this agreement restricts the nation’s autonomy or the control by the Icelandic state of its resources.

The future is at stake

Fellow Icelanders.

The inhospitable forces of nature with which we have lived through the centuries have taught us to accept setbacks calmly and work our way out of difficulties, armed with optimism and determination. The harsh cold, inclement weather and consequences of eruptions, earthquakes and other natural disasters have, through the ages, repeatedly caused unexpected setbacks to the economy and the nation’s prosperity. Today’s situation demands, more than ever, that we face up to and deal with the difficulties facing us with unity and determination. The country’s living standard has deteriorated considerably and the nation has less to share than before.

Large numbers of people have lost their jobs and many families face serious difficulties as a result. We are responsible for the welfare of the least of our brethren, those less fortunate than ourselves, for helping to relieve their burdens. The coming year will be more difficult that many which preceded it, and all of us will feel the change in one way or another. Unfortunately. Each one of us has a role to play in the reconstruction work ahead.

The future of our children and youth hangs in the balance, the future of our country and nation, and of our independence. We have to create and promote a positive view of the opportunities on offer and we have to prevent the loss of the high human capital we possess in ourselves and our descendants. Through the centuries we have lived on what the country has produced. In recent decades we have managed, through ingenuity, education and technological progress, to boost the production of our natural resources without threatening their sustainability.

Lessons from the past

Let us not forget that it is the high level of education and rational development of our social infrastructure which have enabled this tiny country to create for itself a quality of life with few equals. A quality of life which we now must safeguard as far as possible.

We Icelanders have now been taught a lesson, and it is important that we learn from what has happened in order not to repeat the mistakes we have made.

Too many people were deluded by greed and blind faith in our purported genius in buying and selling securities and other assets throughout the world. We advanced too rapidly, to the consternation of many of our staunchest allies. Now we have to earn their trust once more, and I believe we are progressing in the right direction.

That said, it is clear that we need to rebuild trust in our own society and reach a settlement concerning those events which resulted in the collapse of the country’s financial system. The government does not doubt that such a settlement is necessary and will, for its part, make every effort to expedite this and achieve an optimal result.

Independence and international participation

Iceland’s independence is not based on standing isolated and apart from other nations. Our independence, like that of all other nations, rests not least on good relations with the international community and our participation in international fora.

To a major extent we have built our country’s progress on education, technology and know-how developed by other nations which we have then used to our benefit. This we must not forget or underestimate. We have also benefited from international co-operation and our citizens have been educated in other countries, traditionally in the Nordic countries especially. We have negotiated foreign financing for a variety of industrial development projects, and will continue to do so in the future, once we have regained the trust of the international community.

Bearing this in mind, our independence struggle today depends not only on our domestic strength but also on reinforcing our positive relations with other states. During the past few days I have attended meetings with other Nordic prime ministers here in Iceland, and have felt strongly their sincere desire to collaborate in the reconstruction work we face in this country. This goodwill will serve us well, now as before, and in the future.

I venture to maintain, as I speak to you on this national holiday, fellow Icelanders, that the battle for independence we are now fighting is focused to a considerable extent both on how we wish to shape our relations with other nations and how we can manage to achieve unity and reconciliation in this nation for the reconstruction work ahead.

A new world for new ideas

Fellow Icelanders.

In spite of everything that has beset us, we still have every reason to be proud of being Icelanders. We have no reason to be anything but proud of belonging to a nation possessing as much strength and resilience as we have demonstrated through history, a nation which has every possibility of maintaining its place at the forefront. In fact we hold a unique position, with singular opportunities, and enormous resources in comparison with many other nations, but these must be utilised sensibly and fairly.

We have to reconstruct business and industry on more solid financial foundations than before, and on real value creation. To take advantage of the equipment and facilities to which we have access here in Iceland: the people, the country and its land and ocean resources.

We need to take advantage of our entrepreneurial spirit, education, technology and energy, putting to good use the lessons earlier generations have taught us. The reconstruction work now commencing will take some time and will require painful actions, but to build for the future we must lay each stone with care today.

However, fellow Icelanders, challenges can also prove fertile ground for innovative thinking and new ideas. We need to put our youngsters, and all others who can make a new contribution, to work to create a new vision, new approach and new avenues for their innovation and open the way for them to advance. The increased state involvement in industry and restrictions on free markets are temporary measures which had to be applied in order to create the premises for effective rebuilding.

Equal rights for men and women boosts growth and quality of life

Fellow Icelanders.

We must also remember that the effort to increase women’s involvement in Icelandic society was a key aspect of the nation's independence struggle. The increased participation of women in business and industry today, at this crucial moment in the nation’s history, is an important premise for economic growth, educational advance and improved living conditions.

Successful development in industry and society in the coming years is based not least on achieving and maintaining equal rights and opportunities for women and men, in all aspects of Icelandic life. This is the most effective route to boost economic growth and improve the quality of life. All individuals must have equal opportunity to benefit from their own endeavours and develop their potential regardless of their gender. This is the way to create a healthy and just welfare society.

The future is in our hands

We are beginning our nation’s new independence struggle based on values which will give us a better Iceland and a better world. It is crucial that as many people as possible realise and put into practice the idea that equal opportunities to benefit from and develop personal potential is to everyone’s advantage: the individual, households and society as a whole.

When the history of these years is written and people look back on these troubled times and financial recession, I hope that this chapter will be a short one. I also hope that this chapter will tell of a nation united, which refused to be sidetracked, to have its spirit crushed, or give up the struggle. This brief chapter, I hope, will not focus overly on what went wrong, but instead on the fact that here was a nation which learned from experience to rebuild, from the ruins of fool’s gold, a society based on equity, honesty, justice and equality. A nation which made the right decisions and undaunted accepted its task in the international community rather than retreating into its shell, or farther back into the wilderness, as did one of the most famous of our literary characters.

I also hope that this day of national celebration will boost our unity, courage and determination and not least our optimism for the future.

The future is in our hands.

I send all Icelanders, at home or far away, best wishes on Iceland’s National Day.