The ICESAVE Dispute: Grassroots Protest, Governance Structures and why Iceland did not “Play Nicely” after the 2008 Economic Crash

This paper forms part of a larger project examining the dynamics of social protest and political participation in the aftermath of the 2008 economic crash in Iceland. Our focus is on the social movement activity surrounding what is known as the ICESAVE debate, which revolved around whether or not Icelandic citizens had any responsibility towards foreign account-holders due to the losses that they suffered after the collapse of the Icelandic banking sector. We conducted interviews with Icelandic social movement activists, politicians and elected officials in the summer of 2012 and again in December 2012. We use these interviews to reconstruct what narratives of participation and citizenship were used to frame the discussion around ICESAVE, and how these narratives positioned Iceland’s (as well as Icelanders’ collective) responsibility to the international community in general, and more specifically, towards the debts of the banking sector, during times of economic crises and retrenchment. We end with a discussion of how the ICESAVE provides a unique opportunity to examine the contexts of effective citizen engagement, in that it can provide a lens on not only the conditions under which social protest can instigate positive policy responses, but also on how the structure, characteristics, and transparency of governance regimes can mitigate the uptake of supra-national policy pressures associated with neo-liberal capitalism.