Iceland's financial troubles

In the 20th century the Icelandic economy was transformed from a subistence economy, based on agriculture and fishing, into a modern economy. The gains in living standards were enormous, with Icelanders going from being the poorest people in Europe to some of the best off. In recent decades, there has also been a major transformation of the economic conditions and a difficult financial crisis. These developments are analysed in terms of the 20° Scorpio rising horoscope for Iceland.

EEA Agreement
After experiencing high economic growth and high inflation from the late 1960s to the early 1990s, significant reforms of the economy took place with Iceland joining the European Economic Area in 1994. In doing so, Iceland gained unfettered access to the European Single Market, opening up the free flow of labour, capital, goods and services to and from Iceland. The change resulted in increased international opportunities and competition. Inflation was curtailed and the economy became increasingly diversified. Services sector jobs increased in such areas as tourism, IT production and finance. Importantly, following accession to the EEA, Iceland experienced a major expansion which resulted in a crash. In 2000, the IT bubble burst globally and in Iceland. A sharp retrenchment in the IT sector activities and employment followed. In the 2000s, the banking system experienced phenomenal growth, mostly abroad. However, in late 2008 this was followed by the complete collapse of the Icelandic banks in the international banking crisis.

Saturn major period
The Saturn major period ran from February 23, 1981 to February 24, 2000. This is the period when inflation and fluctuations in the purchasing power were highly volatile due to exchange rate changes. During this period a consensus was reached in early 1990s to bring wage growth into line with low and stable inflation, with success for the remainder of the decade. Saturn is 4th lord placed in infancy in the 8th house, where it is conjunct infant Moon as 9th lord. As such, the indications of Saturn and the 4th house are highlighted, but also sub-periods need to be considered to explain the developments. For instance, when Iceland opened up its economy, the Mars sub-period was operating. Mars is 6th lord placed in the 9th house, where it is debilitated and closely afflicted by the nodal axis. The decision to open up the country was fiercly debated and controversial.

Mercury major period
Since February 24, 2000, Iceland has been in the Mercury major period. During the Ketu sub-period, the last of three banks was privatised. Ketu is placed in the 3rd house of initiative and is opposite 6th lord Mars, which suggests sudden financial setbacks. This development was followed by tremendous expansion of the banks abroad. The growth of leverage, both at home and abroad, resulted in concerns on international financial markets in early February 2006, during the sub-period of an infant 12th lord Venus in the 7th house, that the banks were running out of financing options and vulnerable to collapse. At that time, the Icelandic banks became the embodiment of "the canary in the coalmine" and thus an indicator of the conditions in the international financial system. The banks were able to refinance in mid 2006, after the sub-period of a strong 10th lord Sun in the 7th house began, thus temporarily allaying the fears. They also accelerated deposit taking activities in foreign countries, notably the UK and Netherlands. However, the problems in the international financial markets worsened in early 2007. Concerns voiced by Alan Greenspan, former Chairman of the Federal Reserve, about an imminent recession in the USA linked to the stalling housing market startled the market in late February 2007. In March, the sub-period of a badly placed 9th lord Moon began. At this time, poor decisions were made by some of the Icelandic bankers to increase the leverage even more. After the international financial crisis began in earnest in August 2007, the Icelandic banks were completely shut out of the international financial market. After the sub-period of severely afflicted Mars began in August 25, 2008, the death-knell of the Icelandic banks was sounded. In early October 2008, the British government of Gordon Brown took the grave step to close Icelandic banks in London and apply terrorist legislation to the country due to lack of security involving the deposit taking activities. This act effective froze capital flows to and from Iceland. Since then Iceland has been in crisis mode, involving capital controls, draconian budgetary measures to reign in the budget deficit and reduce the debt associated with the banking collapse and efforts to restore a viable banking system.

Icesave dispute
At the same time, Iceland has endured a diplomatic dispute with Great Britain and Netherlands, concerning an implied (not explicit) guarantee of the Iceland state for deposit taking by private Icelandic bank branches in these countries. Since the Rahu sub-period, which began in August 2009, Iceland has negotiated several deals with these countries, but the President has refused to sign the legislation, insisting the nation make the decision. In two referendums, such agreements have been rejected by the populace, most recently on April 9, 2011. The Icelandic voters are rejecting the interpretation of the EU Directives that tax payers are automatically responsible for guaranteeing deposit taking by irresponsible private banks and people seeking highest returns on their deposits, at the neglect of risks involved. The EU Directives are, of course, aimed at securing public confidence in the banking system.

Credit ratings
Prior to the second referendum, the US and British credit rating agencies threatened to reduce the credit rating to junk status. This would make it harder for the Icelandic government, and in fact, Icelandic firms, to borrow abroad. While this is a likely development in the short term, a more auspicious sub-period of Jupiter will open on March 10, 2012. Jupiter as 2nd lord is exalted in the 9th house. While in old age, Jupiter is sufficiently strong to bring benefits and withstand transit afflictions. On the down side is the fact that transits are turning disadvantageous for Scorpio ascendants. In May 2011, the nodes will move into Scorpio and Rahu where they remain until early 2013. At the same time, 2nd lord Jupiter will move into the 6th house of financial stability, where it remains until May 2012. In November 2011, 4th lord Saturn then moves into the 12th house of losses, where it remains until November 2014.

Future periods
The Ketu major period begins on February 23, 2017. This period 7 year period is likely to involve difficulty for Iceland. The likely manifestation is some form of isolation or separation linked to problems with regard to financial stability, conflict or its ability to act. Possibly, the Icesave dispute will be resolved to the disadvantage of Iceland, entailing either financial repayments or limits to its participation on the European Single Market. The following 20 year major period of Venus, from 2024 to 2044, will likely also be linked to some weakness in the national affairs, linked to foreign policy. Possibly, Iceland will join the EU in coming years. From 2044, the Sun period will reign, with a resurgence in Iceland's position in the world likely.