Over the weekend Icelanders have voted in a little noticed referendum about the rules of globalisation. The actual question asked was whether they would be ready to pay for the debts that the Icelandic bank IceSave owes to its mainly British and Dutch former customers.
93% voted against. This is in fact a historic defeat for a previously accepted principle of globalisation that while financial institutions can go overseas and act fairly unchecked, they immediately seize to be multinationals as soon as they are hit by a major crisis.
Icelanders decided enough is enough. Why should they be forced to foot the bill for the reckless mistakes of a group of bankers in a private enterprise over which they had no control?
Naturally, the Iceland saga is still not over. Ratings agencies are expected to downgrade Iceland, and it will be more difficult for them to borrow. We shall see how that goes. However, the people of Iceland at this point must be applauded for their confidence.
It is also quite clear that although initially Icelanders believed they could seek refuge from similar financial crises in the EU, they have now turned against EU membership. They have understood that Brussels would acually be in support of them paying for the sins of their banking system, rather than establishing that financial regulations and oversight had not been prudent enough. They have understood the EU to be what it really is: integration pro-capital rather than pro-people.
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