Wishful thinking in press and politics? "Cultural subsidy saves Iceland's economy"

It is as persistent as the message that everything is better in Germany. Aggrieved lovers of culture who still (and rightly) detest the breaking up of the status quo by Rutte I's hate policies often shout it. We previously wrote that the German miracle is disappointing to say the least, and must now report here that the tree of the creative sector in Iceland is not necessarily the salvation of the Icelandic economy.

Source of the success story is a rather WC duck-like situation. Iceland's culture minister, Katrin Jakobsdóttir, brings the news to the world herself. The progressive Spanish newspaper El Pais draws it only too gladly. After all, Spain is itself tormented by a huge austerity burden, and any news that investing in the least obvious sector could be the economy's salvation goes down like hotcakes there.

In chorus with Iceland's culture minister, the figures sound convincing: 'Culture's contribution to the economy (about €1 billion a year) is now twice that of agriculture and is surpassed only by the legendary export of cod (and other fish) to the rest of Europe, still the country's main economic activity.'

Proportions that we are somewhat familiar with from the Dutch discussion about the yield of the creative sector (a multiple of that here), but the comparison with agriculture is a bit of a tricky one for anyone who has ever looked at Iceland's nature. The agricultural sector is barely able to feed its own population in a country that is under ice from September to May. Indeed, cod is the cork of the economy, although that fish is almost extinct.

The People Mort

Biggest question is actually why the population is not rewarding this huge success story with a resounding lead in the polls before the election. El Pais quotes a government representative as saying that this Conservative lead comes from people wanting their Range Rover back after having had to surrender it in 2008, when the Icelandic banking crisis plunged the world into recession.

But surely it cannot be that simple. Looking further, we see that there is another side to the story. French news website Mediapart analysed the Icelandic miracle a little differently in 2011. Indeed, the country emerged from the crisis in a few years, but the costs were high. In the 2011 article, the figures are obviously different from 2013, but the trend is clear: 'Outlines of recovery may be visible, driven by exports from this very open economy, but households have yet to catch their breath. Consumption remains stuck at 20 per cent of previous levels. Unemployment has fallen back slightly to around 7 per cent, after rising to 9.7 per cent.'

And the population is still in debt. Mediapart describes the problem through an 'average' resident, Sigridur Gudmunsdottir: 'She used to have a "2007 job", pleasant and well-paid work during the euphoric '00s. "Some people say we partied too much, consumed too much and borrowed too much. But that is not true: only a tiny fraction of Icelanders have really benefited from the situation," she argues indignantly.

Some people say we partied too much, consumed too much and borrowed too much. But that is not true

Sigridur was laid off when the recession hit its nadir. She then went back to university at the age of 50. "That way I can get a scholarship and it is higher than unemployment benefits," she says. In 2006, she borrowed 11 million krona (€68,000) to buy a house. This loan was partly indexed to inflation and skyrocketed to Kr 14 million (€86,000) after the crisis. As time went on, she increasingly felt like a cornered cat: on the one hand, the size of her loan increased and, on the other, the real value of her home collapsed. Sigridur is still not sure how to pay off her debts, but she is not complaining.'

But this lady will also not be very happy about millions being poured into the creative sector. Mediapart concludes that there is a huge gap: 'between a political class convinced that the crisis is a thing of the past, and ordinary citizens feeling the effects of the island's near-failure and trying to get back on their feet.'

Perhaps the culture minister's bread-and-play tactics have helped a little, but that success is not felt by everyone, and not everyone recognises its value.

That communication problem between cultural policymakers and the public is encountered in more places.