You know how it is when people suck their teeth, tut disapprovingly and tell you that something’s so idiotic or ludicrous that ‘you couldn’t make it up’?
Well, look no further than the Governor of Iceland’s Central Bank. In the years when Iceland’s economy chugged along without too many problems other than the regular currency devaluations that were allegedly engineered at the behest of fish exporters, the Central Bank was a fusty sort of affair that was almost a clearing house for pre-retirement politicians. It gave them a fat salary for a few years before retirement, but without having to do too much work.
In the final years leading up to the Crash, the Central Bank’s governor was former Prime Minister David Oddsson, a shining example of a man with legal background rather than an economist at the helm of the Central Bank, who presumably wanted the post to sit out a few years in relative peace and quiet. In the event, whatever he did while in that office didn’t do a lot to avoid Iceland’s economy grounding on the rocks in 2008. But David Oddsson is one of those unbelievable figures that Icelandic politics produces and worth a book, or at the least, a blog post here, all to himself one day.
It’s the latest instalment in the Central Bank saga that’s leaving ordinary people scratching their heads in bemusement. The present Governor, appointed in the aftermath of the Crash, really is a man who knows how to do sums. So maybe that’s why he’s now suing his own workplace.
The background is that he was appointed in 2009 on a salary of just over 1.5 million Icelandic krónur per month. That’s €9400, or $12,000. That’s a respectable chunk of change by most people’s reckoning, even taking into account that the man is a highly knowledgeable, skilled and qualified character taking on a tough job.
The problems arose when, after his appointment, Parliament enacted legislation that set a rule saying that public employees couldn’t earn more than the ISK935,000 (€5880/$7500) paycheque that the Prime Minister pockets every month, so the Governor’s salary was reduced in line with this. Doubtless he was disgruntled, and to sweeten the bitter pill, he was given a guaranteed monthly ISK300,000 (€1885/$2400) overtime payment. But the upshot is that he’s still earning around ISK300,000 less than he was originally contracted for.
Most of us, faced with this kind of situation, would start to cast around for a job somewhere else. I don’t know where ex-Governors of national financial institutions look for work, although there must be the equivalent of the Guardian’s Monday edition for media types. Somehow I can’t see him intently going through the job ads in Iceland’s main newspaper, Morgunbladid, now edited by David Oddsson – but that’s a story for another day. But more than likely there’s a suitably discreet old boys network for mega-accountants.
Instead, the Governor of the Central bank has opted to take his employer, the Central Bank, which he runs, to court to get his paycheque bumped up. Presumably backdated, and I’d eat several large hats if there isn’t interest calculated on all that dosh as well.
If the economy were booming, one could understand it, and probably hardly anyone would have noticed. But Iceland is in trouble still. Things maybe aren’t as bleak as they were in the immediate aftermath of the Crash, but they sure as hell aren’t great. The average Joe’s paycheque, if he still has one, has dropped, taxes have gone up and the price of pretty much everything has risen. There are dark comparisons between Iceland today and Eastern European nations in the years right after the Iron Curtain was taken down, scrapped and used to build new BMWs.
So the Central Bank Governor who is looking to trouser a cool extra monthly ISK300,000 (that’s €1885 or $2400, don’t forget) that he feels he’s owed – and in purely legal terms, he probably is – is the same one who has argued that proposed pay rises to Joe Public (many of whom would generally be happy to be earning what he’s after as a salary top-up) are too high.
The truly incongruous part of this is that a man who earns more than the Prime Minister would prefer to see ordinary families continue to struggle – but then has the sheer brass neck to demand more for himself. The Central Bank’s job is to primarily to keep the struggling currency on an even keel and to maintain stability. So you’d be forgiven for imagining that these kind of headlines doesn’t do a lot for financial stability.
Anywhere but Iceland, this would undoubtedly have been a PR disaster resulting in massed damage limitation exercises, possibly resignations, even an apology or two and an admission that perhaps this was ill-timed. It’s worth questioning whether someone with such a clearly tenuous grasp of the realities of life at the ground floor should be in such a post, and maybe the Prime Minister could call his bluff and tell him to sling his hook if he doesn’t like it? That’s the response the rest of us would get if we were to demand a pay rise in these present tough times.
But this is Iceland, where the public and the media have a goldfish memory. Next week it’ll be forgotten. In any case, it was overshadowed by the furore over sub-standard breast implants. Let’s face it, a story about breasts is always going to gather more attention.
The Governor will probably get his pay rise – maybe not the full whack, but there’ll be something to help him keep the wolf from the door – while Joe and Joanna Public who drive the buses, empty the bins and keep the kindergartens running will continue to get by on the statutory minimum.
You couldn’t make it up…