Davíð Oddsson
Encyclopedia
Davíð Oddsson (born 17 January 1948) is an Iceland
ic politician and the longest-serving Prime Minister of Iceland
, holding office from 1991 to 2004. He also served as Foreign Minister
from 2004 to 2005. Previously, he was Mayor of Reykjavík from 1982 to 1991, and he chaired the board of governors of the Central Bank of Iceland
from 2005 to 2009. The collapse of Iceland's banking system led to vocal demands for his resignation both by members of the Icelandic public and by the new Icelandic Prime Minister Jóhanna Sigurðardóttir
, which resulted in him being replaced as head of the Central Bank in March 2009. In September 2009 he was hired as the editor of Morgunblaðið
, one of Iceland's largest newspapers.
. His father was a medical doctor, and his mother a secretary. His parents were not married, and he was brought up in his maternal grandfather’s home in Selfoss
, a small town in the south of Iceland, until his grandfather died. He then moved with his mother and grandmother to Reykjavík. He took an early interest in acting and attended an acting school for a while. He also attended the gymnasium
Menntaskólinn í Reykjavík
where he graduated in the spring of 1970. Davíð married Ástríður Thorarensen, a nurse; they have one son, Þorsteinn who is a judge at the district court at Akureyri. The next six years, Davíð read law at the University of Iceland
, working almost full-time as well. He was assistant to the director of a small theatre (now the Borgarleikhúsið) for a while, and produced, with two friends (Þórarinn Eldjárn
and Hrafn Gunnlaugsson
), a popular radio comedy show for two years; he was for a while a political commentator at the newspaper Morgunblaðið
, and the director of publication of Almenna bókafélagið, a conservative publishing house. He had been elected to the Municipal Council in Reykjavík
in 1974, for the Independence Party
.
who felt that the party should support more strongly attempts to extend economic freedom
in the heavily regulated Icelandic economy. The group included Þorsteinn Pálsson
, Geir H. Haarde, Jón Steinar Gunnlaugsson, Kjartan Gunnarsson
, Magnús Gunnarsson, Brynjólfur Bjarnason
and Hannes Hólmsteinn Gissurarson
, and they published the magazine Eimreiðin from 1972 to 1975; in the following years they followed with interest what was happening in the United Kingdom under Margaret Thatcher
and in the United States under Ronald Reagan
; they also read books and articles by and about Milton Friedman
, Friedrich Hayek
and James M. Buchanan
, who all visited Iceland in the early 1980s and whose messages of limited governments, privatisation, and liberalisation of the economy had a wide impact. Davíð got a chance to further his ideals when, in 1982, the Independence Party
, under his leadership, regained the majority in the Reykjavík Municipal Council which it had lost four years earlier to three left-wing parties. Davíð swiftly reduced the number of Council members from 21 to 15, and merged the largest fishing firm in Reykjavik which belonged to the municipality and had been a huge burden, with a private fishing firm and then sold off the municipality’s assets in the new firm, Grandi
, now one of the biggest fishing firms in Iceland. Incidentally, the director of Grandi, Brynjólfur Bjarnason
, who oversaw what was Davíð’s first privatisation, later became the director of the Icelandic Telephone Company which turned out to be Davíð’s last privatisation in government (2005). As Mayor of Reykjavík, Davíð was behind the building of Reykjavík City Hall
by The Pond
in Reykjavík, and of Perlan
, a revolving restaurant over the old water tanks in Öskjuhlíð
. Despite his libertarian
leanings, Davíð also supported the Reykjavik City Theatre
, in particular the building of a new theatre house which was opened in 1989. In the nine years when Davíð was Mayor of Reykjavík, a new district, Grafarvogur
, was built and a new shopping area around the shopping mall Kringlan
. A forceful and uncompromising Mayor of Reykjavík, Davíð was much-criticized by the left-wing opposition in the Municipal Council.
, had been elected leader of the Independence Party
, and in 1989 Davíð had been elected deputy leader, or Vice-Chairman of the Party. After Þorsteinn Pálsson had to resign as Prime Minister in 1988, after falling out with the leaders of his two coalition parties, there was a widespread feeling in the party that its leadership should be changed, and much pressure on Davíð to stand against Þorsteinn. This he did in 1991, and became leader of the Independence Party
. Under Davíð Oddsson’s leadership, in the parliamentary elections of 1991, the Independence Party
regained most of the support it had lost in 1987 when it had been severely weakened because of a split in its ranks. In record time, Davíð formed a coalition government with the social democrats, Alþýðuflokkurinn
, whose leader, Jón Baldvin Hannibalsson
, became Minister of Foreign Affairs. Jón Baldvin and Davíð jointly decided that Iceland should become the first state to recognise the reinstatement of the sovereignty and independence of the three Baltic countries, Estonia
, Latvia
and Lithuania
, after the fall of Soviet Union.
Davíð’s government inherited a huge budget deficit and a burden of unproductive investments; much money had been spent on fish farming for example, with little result. Inflationary pressures were also building up, while some fish stocks in the Icelandic waters were being depleted. The budget deficit was turned into a surplus in 1996, not least because of the close cooperation between Davíð and Friðrik Sophusson
, the Minister of Finance, who had also been a prominent young libertarian
. There was a surplus almost continuously since then, which has been used to reduce the public debt, and also to reform the pension system, which is now almost wholly self-supporting, while some small companies were privatised. Monetary constraints were imposed by making the Central Bank
largely independent of any political pressures. It also helped the Davíð Oddsson government that there was a consensus between the labour unions and the employers that the rampant inflation of the 1980s, with huge, but largely meaningless, nominal wage increases, could not go on; therefore, in 1990, the unions and the employers had signed a “National Accord”, whereby wage increased would be moderate, and government would be assisted in bringing down inflation. From 1991, inflation in Iceland was on a level with the neighbouring countries.
In 1994, the Social Democratic Party split, and as a result they suffered a huge loss in the 1995 parliamentary elections. While in theory the coalition government maintained its majority, it only consisted of one seat. Davíð Oddsson therefore decided to form a coalition with the Progressive Party
. The leader of the Progressive Party, Halldór Ásgrímsson
, became Minister of Foreign Affairs. In the new government, privatisation was continued on a much greater scale than before: a big and important chain of fish processing plants was sold; part-public or public investment funds were merged and sold as a private investment bank; the two commercial banks under government control were sold in a few stages; The two coalition parties accepted the loud demand by many people that a charge would be imposed on the holders of fishing quotas.
Davíð’s two governments were staunch allies of the United States and strongly in support of NATO, of which Iceland is a founding member. He firmly supported the actions undertaken by the U.S. and its allies in Afghanistan
and Iraq
, taking much criticism from the Icelandic Left. Since the fall of the Soviet Union, there has been some uncertainty about whether the United States defence force could or should remain in Iceland, having been invited there in 1951, at the height of the Cold War
. Davíð has not been enthusiastic about joining the European Union
.
The latter Davíð Oddsson government (1995–2004) embarked on a course of tax cuts. It cut the corporate income tax to 18%; it abolished the net wealth tax; it lowered the personal income tax and inheritance tax. This combination of opening up of the economy, fiscal and monetary stabilisation created an entrepreneurial climate in Iceland that spurred record economic growth in the country, with the real average income of individual households increasing by more than 17%.
, paid for by the Independence Party
, and his friends published a festschrift
of more than 500 pages where many Icelandic writers, scholars and politicians contributed papers. In the 1999 parliamentary elections, Davíð’s Independence Party
retained strong support, despite the attempt by a former government minister of the Party, Sverrir Hermannsson
, to establish a splinter party: the minister had been made director of the National Bank of Iceland and had had to resign because of financial irregularities. In 2002, Davíð published another collection of short stories, Stolið frá höfundi stafrófsins, which was also well-received.
However, in that same year, 2002, there began a controversy in Iceland about the company Baugur, owned by the entrepreneurs Jóhannes Jónsson
and his son, Jón Ásgeir Jóhannesson. A giant on the Icelandic scene, Baugur controlled the majority of the retailing business in Iceland: in parliament, the then-leader of the social democratic party Össur Skarphéðinsson
called for a closer supervision on possible monopoly pricing, specifically mentioning this company. Davíð concurred. In the summer of 2002, the Icelandic police raided the headquarters of Baugur, after a disgruntled former employee in their American operations had produced what he claimed was evidence of financial irregularities. The two main owners of Baugur did not take kindly to this and accused Davíð of orchestrating a campaign against them. They bought a newspaper, Fréttablaðið
, which is sent free of charge into every household in Iceland. The paper opposed Davíð in the bitterly fought 2003 parliamentary election when there was talk of corruption, bribery and abuse of the police. In a speech on 9 February 2003, the main spokesperson of the Social Democratic Alliance, Ingibjörg Sólrún Gísladóttir
, suggested that Davíð might be responsible for the tax investigation of businessman Jón Ólafsson
, then owner of a private television station, and also for the police raid on Baugur. Paraphrasing Shakespeare, she asked: "Are you a friend of the Prime Minister or are you not; that is the question".
, Minister of Foreign Affairs, agreed that Davíð should remain Prime Minister until 15 September 2004, at which time Halldór would become Prime Minister, and that the Independence Party
would, in exchange for relinquishing the Prime Minister’s post, gain an additional ministry in the government from its partner. In 2004 the Davíð Oddsson government became embroiled in controversy, as Davíð introduced a bill which would have made it impossible for large private companies to own more than 15% in any one media, and under which newspapers and television stations could not be owned by the same companies. Davíð argued that this was to prevent concentration of the media in the hands a few people, and to enable the media to remain independent and critical not only towards politicians, but also towards financial moguls. His critics maintained, however, that the proposal was directly aimed at Baugur which Davíð was, they said, obviously regarding as a political enemy. By then, Baugur had bought another newspaper, the television station from Jón Ólafsson
and a few radio stations, and controlled more than half of the media market. In a much-softened version, parliament passed the media bill proposed by the government. But then, for the first time in the history of the Icelandic Republic, in the summer of 2004, the president, Ólafur Ragnar Grímsson
, refused to sign the bill into law. Davíð criticized this, pointing out that the director of the television station formerly owned by Jón Ólafsson
and recently bought by Baugur, Sigurður G. Guðjónsson, had been Ólafur Ragnar Grímsson’s campaign manager in his first presidential campaign, and that Ólafur’s daughter was employed by Baugur. However, Baugur enjoys considerable goodwill in Iceland because their shops offer lower prices than are to be found elsewhere, while their owners are seen as an embodiment of an Icelandic dream of rags-to-riches; many also agreed that the media bill seemed to be a part of a political duel rather than an attempt to make general law. The conclusion of a long struggle was that Davíð Oddsson withdrew the bill instead of holding a national referendum on it, as required by the Icelandic constitution if the president refuses to sign a bill into law.
During his almost 14 years as Prime Minister, Davíð became acquainted with, or friend of, many Western leaders, including Bill Clinton
, George W. Bush
, Václav Klaus
and Silvio Berlusconi
. He has occasionally attended the meetings of the Bilderberg Group
, and he has read a paper to the Mont Pelerin Society
. But he only served as Minister of Foreign Affairs for one year. In the autumn of 2005, Davíð announced that he would leave politics. He said that he felt that the time had come for a new generation to take over. His close ally over many years, Geir H. Haarde, replaced him, both as leader of the Independence Party
and Minister of Foreign Affairs. A probable contribution to this decision was a short, but dramatic, bout with cancer, soon after the crisis over the failure of the media bill. He was, however, fully cured.
. Following the collapse of the Icelandic banking system in the autumn of 2008, Iceland was forced to ask for financial help from the International Monetary Fund
and friendly nations. Some blamed the collapse on the economic policies pursued by the Independence Party under Davíð’s leadership, such as market liberalisation and privatisation. Consequently, there were public calls for Davíð’s dismissal. Following protests outside the Central Bank, the new Prime Minister Jóhanna Sigurðardóttir
requested that Davíð and his two fellow governors resign. He refused this request. On 26 February 2009, following changes to the laws concerning the Central Bank, Davíð was ousted from the bank and replaced by Norwegian economist Svein Harald Øygard
.
In April 2009, Davíð stated that Iceland needs to investigate the “unusual and unconventional loans” given by the banks to senior politicians during the years before the crisis.
announced that Davíð Oddsson and Haraldur Johannessen, former editor of business paper Viðskiptablaðið, had been hired as editors of the paper. The decision was announced in the wake of much speculation and rumours about who would be the new editor after the dismissal of the previous editor, Ólafur Þ. Stephensen. Since Davíð took over as editor-in-chief a third of Morgunbladid's subscribers have cancelled their subscriptions. In 2009, the paper lost 667 million ISK. In the report of the Icelandic parliament's Special Investigation Commission, published in April 2010, the appointment of Davíð Oddsson to editor-in-chief of Morgunblaðið and the firing of many experienced journalists from the newspaper is mentioned as an example of how the owners of media in Iceland often don't hesitate to manipulate them. "Their objective seems to be to run an opinion journalism and protect special interests rather than ensure a professional and fair reporting."
Iceland
Iceland , described as the Republic of Iceland, is a Nordic and European island country in the North Atlantic Ocean, on the Mid-Atlantic Ridge. Iceland also refers to the main island of the country, which contains almost all the population and almost all the land area. The country has a population...
ic politician and the longest-serving Prime Minister of Iceland
Prime Minister of Iceland
The Prime Minister of Iceland is Iceland's head of government. The prime minister is appointed formally by the President and exercises executive authority along with the cabinet subject to parliamentary support....
, holding office from 1991 to 2004. He also served as Foreign Minister
Minister for Foreign Affairs of Iceland
The Icelandic Ministry for Foreign Affairs or the Icelandic Ministry for Foreign Affairs and External Trade is a cabinet-level ministry responsible for the country's foreign relations and defence...
from 2004 to 2005. Previously, he was Mayor of Reykjavík from 1982 to 1991, and he chaired the board of governors of the Central Bank of Iceland
Central Bank of Iceland
The Central Bank of Iceland is the central bank or reserve bank of Iceland. It has served in this capacity since 1961, when it was created by an act of the Alþingi out of the central banking department of Landsbanki Íslands, which had had the sole right of note issuance since 1927 and had...
from 2005 to 2009. The collapse of Iceland's banking system led to vocal demands for his resignation both by members of the Icelandic public and by the new Icelandic Prime Minister Jóhanna Sigurðardóttir
Jóhanna Sigurðardóttir
Jóhanna Sigurðardóttir , , is the Prime Minister of Iceland. Many years a politician, she was previously Iceland's Minister of Social Affairs and Social Security from 1987–1994 and 2007–2009. She has been a member of the Althing for Reykjavík constituencies since 1978, winning re-election on eight...
, which resulted in him being replaced as head of the Central Bank in March 2009. In September 2009 he was hired as the editor of Morgunblaðið
Morgunblaðið
Morgunblaðið is a newspaper published in Iceland, founded by Vilhjálmur Finsen & Olaf Björnsson, brother to the first president. The first issue, only eight pages long, was published on 2 November 1913. Six years later, in 1919, the corporation Árvakur bought out the company...
, one of Iceland's largest newspapers.
Early years
Davíð Oddsson was born in ReykjavíkReykjavík
Reykjavík is the capital and largest city in Iceland.Its latitude at 64°08' N makes it the world's northernmost capital of a sovereign state. It is located in southwestern Iceland, on the southern shore of Faxaflói Bay...
. His father was a medical doctor, and his mother a secretary. His parents were not married, and he was brought up in his maternal grandfather’s home in Selfoss
Selfoss (town)
Selfoss is a town in southern Iceland on the banks of Ölfusá river.It is part, and seat, of the municipality Árborg. The Ring Road runs through the town on its way between Hveragerði and Hella...
, a small town in the south of Iceland, until his grandfather died. He then moved with his mother and grandmother to Reykjavík. He took an early interest in acting and attended an acting school for a while. He also attended the gymnasium
Gymnasium (school)
A gymnasium is a type of school providing secondary education in some parts of Europe, comparable to English grammar schools or sixth form colleges and U.S. college preparatory high schools. The word γυμνάσιον was used in Ancient Greece, meaning a locality for both physical and intellectual...
Menntaskólinn í Reykjavík
Menntaskólinn í Reykjavík
Menntaskólinn í Reykjavík is the oldest gymnasium in Reykjavík, Iceland....
where he graduated in the spring of 1970. Davíð married Ástríður Thorarensen, a nurse; they have one son, Þorsteinn who is a judge at the district court at Akureyri. The next six years, Davíð read law at the University of Iceland
University of Iceland
The University of Iceland is a public research university in Reykjavík, Iceland, and the country's oldest and largest institution of higher education. Founded in 1911, it has grown steadily from a small civil servants' school to a modern comprehensive university, providing instruction for about...
, working almost full-time as well. He was assistant to the director of a small theatre (now the Borgarleikhúsið) for a while, and produced, with two friends (Þórarinn Eldjárn
Þórarinn Eldjárn
Þórarinn Eldjárn is an Icelandic writer born on 22 August 1949. He studied at the University of Lund and the University of Iceland. He has written numerous poems, stories, and novels. He has also translated numerous books into Icelandic, including Alice in Wonderland. In addition, he has produced...
and Hrafn Gunnlaugsson
Hrafn Gunnlaugsson
Hrafn Gunnlaugsson is an Icelandic moviemaker. He is the brother of the actress Tinna Gunnlaugsdóttir. He is mostly known for his series of Viking movies, sometimes called "Cod Westerns"...
), a popular radio comedy show for two years; he was for a while a political commentator at the newspaper Morgunblaðið
Morgunblaðið
Morgunblaðið is a newspaper published in Iceland, founded by Vilhjálmur Finsen & Olaf Björnsson, brother to the first president. The first issue, only eight pages long, was published on 2 November 1913. Six years later, in 1919, the corporation Árvakur bought out the company...
, and the director of publication of Almenna bókafélagið, a conservative publishing house. He had been elected to the Municipal Council in Reykjavík
Reykjavík
Reykjavík is the capital and largest city in Iceland.Its latitude at 64°08' N makes it the world's northernmost capital of a sovereign state. It is located in southwestern Iceland, on the southern shore of Faxaflói Bay...
in 1974, for the Independence Party
Independence Party (Iceland)
The Independence Party is a centre-right political party in Iceland. Liberal conservative and Eurosceptic, it is the second-largest party in the Althing, with sixteen seats. The chairman of the party is Bjarni Benediktsson and vice chairman is Ólöf Nordal....
.
Mayor of Reykjavík (1982–1991)
Davíð Oddsson was a member of a group of young conservative-libertarians within the Independence PartyIndependence Party (Iceland)
The Independence Party is a centre-right political party in Iceland. Liberal conservative and Eurosceptic, it is the second-largest party in the Althing, with sixteen seats. The chairman of the party is Bjarni Benediktsson and vice chairman is Ólöf Nordal....
who felt that the party should support more strongly attempts to extend economic freedom
Economic freedom
Economic freedom is a term used in economic and policy debates. As with freedom generally, there are various definitions, but no universally accepted concept of economic freedom...
in the heavily regulated Icelandic economy. The group included Þorsteinn Pálsson
Þorsteinn Pálsson
Þorsteinn Pálsson or Thorsteinn Pálsson is a former Prime Minister of Iceland for the Independence Party. He served from 8 July 1987 to 28 September 1988...
, Geir H. Haarde, Jón Steinar Gunnlaugsson, Kjartan Gunnarsson
Kjartan Gunnarsson
Kjartan Gunnarsson is an Icelandic lawyer, best known for serving for 26 years as the executive director of the Icelandic right-wing Independence Party, from 1980 until 2006. He has also worked for Landsbanki bank. He is a longtime supporter and friend of former Icelandic Prime Minister Davíð...
, Magnús Gunnarsson, Brynjólfur Bjarnason
Brynjólfur Bjarnason
Brynjólfur Bjarnason was an Icelandic communist politician. He became a student at the University of Copenhagen, and in 1923 he became a communist during a stay in Berlin. After returning to Iceland, he became a teacher...
and Hannes Hólmsteinn Gissurarson
Hannes Hólmsteinn Gissurarson
Hannes Hólmsteinn Gissurarson is a professor of political science at the University of Iceland and a frequent commentator on current affairs in the Icelandic media...
, and they published the magazine Eimreiðin from 1972 to 1975; in the following years they followed with interest what was happening in the United Kingdom under Margaret Thatcher
Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher, was Prime Minister of the United Kingdom from 1979 to 1990...
and in the United States under Ronald Reagan
Ronald Reagan
Ronald Wilson Reagan was the 40th President of the United States , the 33rd Governor of California and, prior to that, a radio, film and television actor....
; they also read books and articles by and about Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
, Friedrich Hayek
Friedrich Hayek
Friedrich August Hayek CH , born in Austria-Hungary as Friedrich August von Hayek, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought...
and James M. Buchanan
James M. Buchanan
James McGill Buchanan, Jr. is an American economist known for his work on public choice theory, for which he received the 1986 Nobel Memorial Prize in Economic Sciences. Buchanan's work initiated research on how politicians' self-interest and non-economic forces affect government economic policy...
, who all visited Iceland in the early 1980s and whose messages of limited governments, privatisation, and liberalisation of the economy had a wide impact. Davíð got a chance to further his ideals when, in 1982, the Independence Party
Independence Party (Iceland)
The Independence Party is a centre-right political party in Iceland. Liberal conservative and Eurosceptic, it is the second-largest party in the Althing, with sixteen seats. The chairman of the party is Bjarni Benediktsson and vice chairman is Ólöf Nordal....
, under his leadership, regained the majority in the Reykjavík Municipal Council which it had lost four years earlier to three left-wing parties. Davíð swiftly reduced the number of Council members from 21 to 15, and merged the largest fishing firm in Reykjavik which belonged to the municipality and had been a huge burden, with a private fishing firm and then sold off the municipality’s assets in the new firm, Grandi
HB Grandi
HB Grandi is an Icelandic fishing industry company, one of the largest in the country, based in Reykjavík. The company formed from the merger of Grandi from Reykjavík and Haraldur Böðvarsson from Akranes. on January 1, 2004. Later that year, the company merged with Tangi from Vopnafjörður and...
, now one of the biggest fishing firms in Iceland. Incidentally, the director of Grandi, Brynjólfur Bjarnason
Brynjólfur Bjarnason
Brynjólfur Bjarnason was an Icelandic communist politician. He became a student at the University of Copenhagen, and in 1923 he became a communist during a stay in Berlin. After returning to Iceland, he became a teacher...
, who oversaw what was Davíð’s first privatisation, later became the director of the Icelandic Telephone Company which turned out to be Davíð’s last privatisation in government (2005). As Mayor of Reykjavík, Davíð was behind the building of Reykjavík City Hall
Ráðhús Reykjavíkur
Ráðhús Reykjavíkur is situated by the Tjörnin in Reykjavík. It houses the offices of the mayor of Reykjavík, a café and a large 3D map of Iceland. It is sometimes used for art exhibitions....
by The Pond
Tjörnin
Tjörnin is a small lake in central Reykjavík, the capital of Iceland. Although it is not among the biggest lakes in the country, it is one of the best known....
in Reykjavík, and of Perlan
Perlan
Perlan is a landmark building in Reykjavík, the capital of Iceland. It is 25.7 metres high. It was originally designed by Ingimundur Sveinsson. Perlan is situated on the hill Öskjuhlíð where there had been hot water storage tanks for decades. In 1991 the tanks were updated and a...
, a revolving restaurant over the old water tanks in Öskjuhlíð
Öskjuhlíð
Öskjuhlíð is a hill in the centre of Reykjavík, Iceland. It is 61 metres above sea level. The hill is a designated outdoors area and is covered with trees. At the top of the hill stands Perlan, on top six water tanks...
. Despite his libertarian
Libertarianism
Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...
leanings, Davíð also supported the Reykjavik City Theatre
Reykjavik City Theatre
Reykjavik City TheatreIn 1989, after 90 years of performing in a small wooden building in the city centre, the company inaugurated a new, modern theatre complex. The large new building , comparable to many of Europe's best theatres, has very modern facilities and four highly technical and...
, in particular the building of a new theatre house which was opened in 1989. In the nine years when Davíð was Mayor of Reykjavík, a new district, Grafarvogur
Grafarvogur
Grafarvogur is among the largest residential suburbs of Reykjavík, Iceland. It is a relatively new neighbourhood, major construction began in the late 1980s and continued well into the '90s.-Sub-districts:...
, was built and a new shopping area around the shopping mall Kringlan
Kringlan
Kringlan is the largest shopping mall in Reykjavík with over 170 shops, restaurants and services. Built in 1987, it contains everything from a library, theatre and cinema to a liquor store, candy stores and a pub. It has grown over the years, and is thought by many to be the biggest threat for the...
. A forceful and uncompromising Mayor of Reykjavík, Davíð was much-criticized by the left-wing opposition in the Municipal Council.
Alliance with the Social Democrats (1991–1995)
In 1983, Davíð Oddsson’s old friend and ally, Þorsteinn PálssonÞorsteinn Pálsson
Þorsteinn Pálsson or Thorsteinn Pálsson is a former Prime Minister of Iceland for the Independence Party. He served from 8 July 1987 to 28 September 1988...
, had been elected leader of the Independence Party
Independence Party (Iceland)
The Independence Party is a centre-right political party in Iceland. Liberal conservative and Eurosceptic, it is the second-largest party in the Althing, with sixteen seats. The chairman of the party is Bjarni Benediktsson and vice chairman is Ólöf Nordal....
, and in 1989 Davíð had been elected deputy leader, or Vice-Chairman of the Party. After Þorsteinn Pálsson had to resign as Prime Minister in 1988, after falling out with the leaders of his two coalition parties, there was a widespread feeling in the party that its leadership should be changed, and much pressure on Davíð to stand against Þorsteinn. This he did in 1991, and became leader of the Independence Party
Independence Party (Iceland)
The Independence Party is a centre-right political party in Iceland. Liberal conservative and Eurosceptic, it is the second-largest party in the Althing, with sixteen seats. The chairman of the party is Bjarni Benediktsson and vice chairman is Ólöf Nordal....
. Under Davíð Oddsson’s leadership, in the parliamentary elections of 1991, the Independence Party
Independence Party (Iceland)
The Independence Party is a centre-right political party in Iceland. Liberal conservative and Eurosceptic, it is the second-largest party in the Althing, with sixteen seats. The chairman of the party is Bjarni Benediktsson and vice chairman is Ólöf Nordal....
regained most of the support it had lost in 1987 when it had been severely weakened because of a split in its ranks. In record time, Davíð formed a coalition government with the social democrats, Alþýðuflokkurinn
Social Democratic Party (Iceland)
The Social Democratic Party was an Icelandic Political Party based on social-democratic ideas. It was founded in 1916 as the political representation of the trade unions of Iceland....
, whose leader, Jón Baldvin Hannibalsson
Jón Baldvin Hannibalsson
Jón Baldvin Hannibalsson is an Icelandic politician.-Education:The son of Hannibal Valdimarsson, Jón Baldvin Hannibalsson earned an MA in Economics from University of Edinburgh in 1963. He studied at Stockholm University from 1963–1964, and studied teacher education at the University of Iceland in...
, became Minister of Foreign Affairs. Jón Baldvin and Davíð jointly decided that Iceland should become the first state to recognise the reinstatement of the sovereignty and independence of the three Baltic countries, Estonia
Estonia
Estonia , officially the Republic of Estonia , is a state in the Baltic region of Northern Europe. It is bordered to the north by the Gulf of Finland, to the west by the Baltic Sea, to the south by Latvia , and to the east by Lake Peipsi and the Russian Federation . Across the Baltic Sea lies...
, Latvia
Latvia
Latvia , officially the Republic of Latvia , is a country in the Baltic region of Northern Europe. It is bordered to the north by Estonia , to the south by Lithuania , to the east by the Russian Federation , to the southeast by Belarus and shares maritime borders to the west with Sweden...
and Lithuania
Lithuania
Lithuania , officially the Republic of Lithuania is a country in Northern Europe, the biggest of the three Baltic states. It is situated along the southeastern shore of the Baltic Sea, whereby to the west lie Sweden and Denmark...
, after the fall of Soviet Union.
Davíð’s government inherited a huge budget deficit and a burden of unproductive investments; much money had been spent on fish farming for example, with little result. Inflationary pressures were also building up, while some fish stocks in the Icelandic waters were being depleted. The budget deficit was turned into a surplus in 1996, not least because of the close cooperation between Davíð and Friðrik Sophusson
Friðrik Sophusson
Friðrik Sophusson , is an Icelandic politician and company director. He was the former director of Icelandic state-run energy firm Landsvirkjun.-Career:...
, the Minister of Finance, who had also been a prominent young libertarian
Libertarianism
Libertarianism, in the strictest sense, is the political philosophy that holds individual liberty as the basic moral principle of society. In the broadest sense, it is any political philosophy which approximates this view...
. There was a surplus almost continuously since then, which has been used to reduce the public debt, and also to reform the pension system, which is now almost wholly self-supporting, while some small companies were privatised. Monetary constraints were imposed by making the Central Bank
Central Bank of Iceland
The Central Bank of Iceland is the central bank or reserve bank of Iceland. It has served in this capacity since 1961, when it was created by an act of the Alþingi out of the central banking department of Landsbanki Íslands, which had had the sole right of note issuance since 1927 and had...
largely independent of any political pressures. It also helped the Davíð Oddsson government that there was a consensus between the labour unions and the employers that the rampant inflation of the 1980s, with huge, but largely meaningless, nominal wage increases, could not go on; therefore, in 1990, the unions and the employers had signed a “National Accord”, whereby wage increased would be moderate, and government would be assisted in bringing down inflation. From 1991, inflation in Iceland was on a level with the neighbouring countries.
Alliance with the Progressive Party (1995–1999)
Progressive Party (Iceland)
The Progressive Party is an agrarian, liberal and centrist party in Iceland. The party is a member of the Liberal International. Current chairman of the party is Sigmundur Davíð Gunnlaugsson. He was elected on January 18, 2009. His predecessor was Valgerður Sverrisdóttir, who only served as...
. The leader of the Progressive Party, Halldór Ásgrímsson
Halldór Ásgrímsson
Halldór Ásgrímsson is an Icelandic politician, formerly Prime Minister of Iceland from 2004 to 2006 and leader of the Progressive Party from 1994 to 2006.-Education and early life:...
, became Minister of Foreign Affairs. In the new government, privatisation was continued on a much greater scale than before: a big and important chain of fish processing plants was sold; part-public or public investment funds were merged and sold as a private investment bank; the two commercial banks under government control were sold in a few stages; The two coalition parties accepted the loud demand by many people that a charge would be imposed on the holders of fishing quotas.
Davíð’s two governments were staunch allies of the United States and strongly in support of NATO, of which Iceland is a founding member. He firmly supported the actions undertaken by the U.S. and its allies in Afghanistan
Afghanistan
Afghanistan , officially the Islamic Republic of Afghanistan, is a landlocked country located in the centre of Asia, forming South Asia, Central Asia and the Middle East. With a population of about 29 million, it has an area of , making it the 42nd most populous and 41st largest nation in the world...
and Iraq
Iraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....
, taking much criticism from the Icelandic Left. Since the fall of the Soviet Union, there has been some uncertainty about whether the United States defence force could or should remain in Iceland, having been invited there in 1951, at the height of the Cold War
Cold War
The Cold War was the continuing state from roughly 1946 to 1991 of political conflict, military tension, proxy wars, and economic competition between the Communist World—primarily the Soviet Union and its satellite states and allies—and the powers of the Western world, primarily the United States...
. Davíð has not been enthusiastic about joining the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
.
The latter Davíð Oddsson government (1995–2004) embarked on a course of tax cuts. It cut the corporate income tax to 18%; it abolished the net wealth tax; it lowered the personal income tax and inheritance tax. This combination of opening up of the economy, fiscal and monetary stabilisation created an entrepreneurial climate in Iceland that spurred record economic growth in the country, with the real average income of individual households increasing by more than 17%.
Alliance with Progressive Party (1999–2004)
As a young man, Davíð Oddsson authored or co-authored several plays for the stage and for television. During his days as political leader, he pursued his literary interests as well, and in 1997, he published a collection of short stories, Nokkrir góðir dagar án Guðnýjar, which became a best-seller in Iceland. Davíð celebrated his 50th birthday at a huge reception in PerlanPerlan
Perlan is a landmark building in Reykjavík, the capital of Iceland. It is 25.7 metres high. It was originally designed by Ingimundur Sveinsson. Perlan is situated on the hill Öskjuhlíð where there had been hot water storage tanks for decades. In 1991 the tanks were updated and a...
, paid for by the Independence Party
Independence Party (Iceland)
The Independence Party is a centre-right political party in Iceland. Liberal conservative and Eurosceptic, it is the second-largest party in the Althing, with sixteen seats. The chairman of the party is Bjarni Benediktsson and vice chairman is Ólöf Nordal....
, and his friends published a festschrift
Festschrift
In academia, a Festschrift , is a book honoring a respected person, especially an academic, and presented during his or her lifetime. The term, borrowed from German, could be translated as celebration publication or celebratory writing...
of more than 500 pages where many Icelandic writers, scholars and politicians contributed papers. In the 1999 parliamentary elections, Davíð’s Independence Party
Independence Party (Iceland)
The Independence Party is a centre-right political party in Iceland. Liberal conservative and Eurosceptic, it is the second-largest party in the Althing, with sixteen seats. The chairman of the party is Bjarni Benediktsson and vice chairman is Ólöf Nordal....
retained strong support, despite the attempt by a former government minister of the Party, Sverrir Hermannsson
Sverrir Hermannsson
Sverrir Hermannsson is an Icelandic politician, businessman, and banker. Beginning in politics as a member of the Independence Party, he was Speaker of the Althing from 1979 to 1983....
, to establish a splinter party: the minister had been made director of the National Bank of Iceland and had had to resign because of financial irregularities. In 2002, Davíð published another collection of short stories, Stolið frá höfundi stafrófsins, which was also well-received.
However, in that same year, 2002, there began a controversy in Iceland about the company Baugur, owned by the entrepreneurs Jóhannes Jónsson
Jóhannes Jónsson
Jóhannes Jónsson is an Icelandic businessman and one of the founders of the investment company Baugur Group, which applied for bankruptcy protection in February 2009. He founded the Bónus stores in Iceland in 1989 with his son and president of Baugur Group, Jón Ásgeir Jóhannesson....
and his son, Jón Ásgeir Jóhannesson. A giant on the Icelandic scene, Baugur controlled the majority of the retailing business in Iceland: in parliament, the then-leader of the social democratic party Össur Skarphéðinsson
Össur Skarphéðinsson
Össur Skarphéðinsson is an Icelandic politician who has been Minister for Foreign Affairs since February 2009.Össur matriculated from the Reykjavík Grammar School in 1973, and gained a BS in Biology from the University of Iceland in 1979, and a doctorate in physiology from the University of East...
called for a closer supervision on possible monopoly pricing, specifically mentioning this company. Davíð concurred. In the summer of 2002, the Icelandic police raided the headquarters of Baugur, after a disgruntled former employee in their American operations had produced what he claimed was evidence of financial irregularities. The two main owners of Baugur did not take kindly to this and accused Davíð of orchestrating a campaign against them. They bought a newspaper, Fréttablaðið
Fréttablaðið
Fréttablaðið is the Icelandic newspaper with the largest circulation. Fréttablaðið is in Icelandic and is distributed free of charge to homes in parts of the country.It is published by the media group 365 prentmiðlar....
, which is sent free of charge into every household in Iceland. The paper opposed Davíð in the bitterly fought 2003 parliamentary election when there was talk of corruption, bribery and abuse of the police. In a speech on 9 February 2003, the main spokesperson of the Social Democratic Alliance, Ingibjörg Sólrún Gísladóttir
Ingibjörg Sólrún Gísladóttir
Ingibjörg Sólrún Gísladóttir is an Icelandic politician from the Social Democratic Alliance, formerly Minister for Foreign Affairs 2007–2009 and leader of the Alliance 2005–2009.-Education:...
, suggested that Davíð might be responsible for the tax investigation of businessman Jón Ólafsson
Jón Ólafsson
Jón Ólafsson is the name of:*Jón Ólafsson from Grunnavík*Jón Ólafsson...
, then owner of a private television station, and also for the police raid on Baugur. Paraphrasing Shakespeare, she asked: "Are you a friend of the Prime Minister or are you not; that is the question".
Foreign Minister (2004–2005)
After the 2003 elections, Davíð Oddsson and the leader of his coalition party, Halldór ÁsgrímssonHalldór Ásgrímsson
Halldór Ásgrímsson is an Icelandic politician, formerly Prime Minister of Iceland from 2004 to 2006 and leader of the Progressive Party from 1994 to 2006.-Education and early life:...
, Minister of Foreign Affairs, agreed that Davíð should remain Prime Minister until 15 September 2004, at which time Halldór would become Prime Minister, and that the Independence Party
Independence Party
Independence Party can refer to various political parties past and present throughout the world, such as:*Independence Party *Independence Party *Independence Party *Independence Party...
would, in exchange for relinquishing the Prime Minister’s post, gain an additional ministry in the government from its partner. In 2004 the Davíð Oddsson government became embroiled in controversy, as Davíð introduced a bill which would have made it impossible for large private companies to own more than 15% in any one media, and under which newspapers and television stations could not be owned by the same companies. Davíð argued that this was to prevent concentration of the media in the hands a few people, and to enable the media to remain independent and critical not only towards politicians, but also towards financial moguls. His critics maintained, however, that the proposal was directly aimed at Baugur which Davíð was, they said, obviously regarding as a political enemy. By then, Baugur had bought another newspaper, the television station from Jón Ólafsson
Jón Ólafsson
Jón Ólafsson is the name of:*Jón Ólafsson from Grunnavík*Jón Ólafsson...
and a few radio stations, and controlled more than half of the media market. In a much-softened version, parliament passed the media bill proposed by the government. But then, for the first time in the history of the Icelandic Republic, in the summer of 2004, the president, Ólafur Ragnar Grímsson
Ólafur Ragnar Grímsson
Ólafur Ragnar Grímsson is the fifth and current President of Iceland. He has served as President since 1996; he was unopposed in 2000, re-elected for a third term in 2004, and re-elected unopposed for a fourth term in 2008. He is the longest-serving left-wing president in the history of...
, refused to sign the bill into law. Davíð criticized this, pointing out that the director of the television station formerly owned by Jón Ólafsson
Jón Ólafsson
Jón Ólafsson is the name of:*Jón Ólafsson from Grunnavík*Jón Ólafsson...
and recently bought by Baugur, Sigurður G. Guðjónsson, had been Ólafur Ragnar Grímsson’s campaign manager in his first presidential campaign, and that Ólafur’s daughter was employed by Baugur. However, Baugur enjoys considerable goodwill in Iceland because their shops offer lower prices than are to be found elsewhere, while their owners are seen as an embodiment of an Icelandic dream of rags-to-riches; many also agreed that the media bill seemed to be a part of a political duel rather than an attempt to make general law. The conclusion of a long struggle was that Davíð Oddsson withdrew the bill instead of holding a national referendum on it, as required by the Icelandic constitution if the president refuses to sign a bill into law.
During his almost 14 years as Prime Minister, Davíð became acquainted with, or friend of, many Western leaders, including Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
, George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
, Václav Klaus
Václav Klaus
Václav Klaus is the second President of the Czech Republic and a former Prime Minister .An economist, he is co-founder of the Civic Democratic Party, the Czech Republic's largest center-right political party. Klaus is a eurosceptic, but he reluctantly endorsed the Lisbon treaty as president of...
and Silvio Berlusconi
Silvio Berlusconi
Silvio Berlusconi , also known as Il Cavaliere – from knighthood to the Order of Merit for Labour which he received in 1977 – is an Italian politician and businessman who served three terms as Prime Minister of Italy, from 1994 to 1995, 2001 to 2006, and 2008 to 2011. Berlusconi is also the...
. He has occasionally attended the meetings of the Bilderberg Group
Bilderberg Group
The Bilderberg Group, Bilderberg conference, or Bilderberg Club is an annual, unofficial, invitation-only conference of approximately 120 to 140 guests from North America and Western Europe, most of whom are people of influence. About one-third are from government and politics, and two-thirds from...
, and he has read a paper to the Mont Pelerin Society
Mont Pelerin Society
The Mont Pelerin Society is an international organization composed of economists , philosophers, historians, intellectuals, business leaders, and others who favour classical liberalism...
. But he only served as Minister of Foreign Affairs for one year. In the autumn of 2005, Davíð announced that he would leave politics. He said that he felt that the time had come for a new generation to take over. His close ally over many years, Geir H. Haarde, replaced him, both as leader of the Independence Party
Independence Party (Iceland)
The Independence Party is a centre-right political party in Iceland. Liberal conservative and Eurosceptic, it is the second-largest party in the Althing, with sixteen seats. The chairman of the party is Bjarni Benediktsson and vice chairman is Ólöf Nordal....
and Minister of Foreign Affairs. A probable contribution to this decision was a short, but dramatic, bout with cancer, soon after the crisis over the failure of the media bill. He was, however, fully cured.
Central Bank Governor (2005–2009)
In October 2005, Davíð was appointed the Governor of the Central Bank of IcelandCentral Bank of Iceland
The Central Bank of Iceland is the central bank or reserve bank of Iceland. It has served in this capacity since 1961, when it was created by an act of the Alþingi out of the central banking department of Landsbanki Íslands, which had had the sole right of note issuance since 1927 and had...
. Following the collapse of the Icelandic banking system in the autumn of 2008, Iceland was forced to ask for financial help from the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
and friendly nations. Some blamed the collapse on the economic policies pursued by the Independence Party under Davíð’s leadership, such as market liberalisation and privatisation. Consequently, there were public calls for Davíð’s dismissal. Following protests outside the Central Bank, the new Prime Minister Jóhanna Sigurðardóttir
Jóhanna Sigurðardóttir
Jóhanna Sigurðardóttir , , is the Prime Minister of Iceland. Many years a politician, she was previously Iceland's Minister of Social Affairs and Social Security from 1987–1994 and 2007–2009. She has been a member of the Althing for Reykjavík constituencies since 1978, winning re-election on eight...
requested that Davíð and his two fellow governors resign. He refused this request. On 26 February 2009, following changes to the laws concerning the Central Bank, Davíð was ousted from the bank and replaced by Norwegian economist Svein Harald Øygard
Svein Harald Øygard
Svein Harald Øygard is a Norwegian economist. He was head of the Central Bank of Iceland in 2009, succeeded Davíð Oddsson and was in office from February to August 2009....
.
In April 2009, Davíð stated that Iceland needs to investigate the “unusual and unconventional loans” given by the banks to senior politicians during the years before the crisis.
Editor of Morgunblaðið (2009–present)
On 24 September 2009, the new owners of MorgunblaðiðMorgunblaðið
Morgunblaðið is a newspaper published in Iceland, founded by Vilhjálmur Finsen & Olaf Björnsson, brother to the first president. The first issue, only eight pages long, was published on 2 November 1913. Six years later, in 1919, the corporation Árvakur bought out the company...
announced that Davíð Oddsson and Haraldur Johannessen, former editor of business paper Viðskiptablaðið, had been hired as editors of the paper. The decision was announced in the wake of much speculation and rumours about who would be the new editor after the dismissal of the previous editor, Ólafur Þ. Stephensen. Since Davíð took over as editor-in-chief a third of Morgunbladid's subscribers have cancelled their subscriptions. In 2009, the paper lost 667 million ISK. In the report of the Icelandic parliament's Special Investigation Commission, published in April 2010, the appointment of Davíð Oddsson to editor-in-chief of Morgunblaðið and the firing of many experienced journalists from the newspaper is mentioned as an example of how the owners of media in Iceland often don't hesitate to manipulate them. "Their objective seems to be to run an opinion journalism and protect special interests rather than ensure a professional and fair reporting."
External links
- May 2000 profile of Davíð Oddsson in the London Spectator, by Kristján Guy Burgess
- April 2001 profile of Davíð Oddsson in the Charlemagne column of The Economist
- December 2008 article from the Economist that mentions Davíð Oddsson http://www.economist.com/world/europe/displaystory.cfm?story_id=12762027
- Independent article on resignation of Geir Haarde, mentions that Davíð Oddsson is real target of Icelandic protest http://www.independent.co.uk/news/world/europe/iceland-pm-is-first-global-political-casualty-of-the-crunch-1514527.html* Transcript of Davíð Oddsson's meeting with US President George W. Bush
- Privatisation during the Davíð Oddsson governments
- http://courses.wcupa.edu/rbove/eco343/040Compecon/Scand/Iceland/040129prosper.htmArticle on Icelandic economic miracle by H.H.GissurarsonHannes Hólmsteinn GissurarsonHannes Hólmsteinn Gissurarson is a professor of political science at the University of Iceland and a frequent commentator on current affairs in the Icelandic media...
in Wall Street Journal 2004] - http://eng.forsaetisraduneyti.is/minister/speeches-and-articles/nr/1391Davíð Oddsson’s address on the Icelandic economy at the AEIAmerican Enterprise InstituteThe American Enterprise Institute for Public Policy Research is a conservative think tank founded in 1943. Its stated mission is "to defend the principles and improve the institutions of American freedom and democratic capitalism—limited government, private enterprise, individual liberty and...
in Washington DC 14 June 2004] - Davíð Oddsson’s paper on Iceland and the EU at Linacre College, Oxford, 27 April 2004
- Summary of media coverage on Davíð Oddsson and Baugur in England
- Article on the Special Investigation Commission's report charging Davíð Oddsson with gross negligence in the 2008 banking collapse