The Republic of Iceland is a shipwreck

This is a must-listen.

Paul Henley, investigative journalist and broadcaster, says his goodbyes to an Icelandic interviewee:

“And I’ve just left him for the night, in the middle of a field, in a run-down junkbox on wheels with barely any heating, looking forward to the Icelandic winter. I expected my trip to Iceland to be depressing under the circumstances but… not, NOT quite that depressing – to be reduced to this by a national financial crisis out of your control. So I get into my taxi and go back to my warm hotel and speculate on the future of Iceland and look forward to many more stories along these lines. In this edition of Crossing Continents I’m going to try and tell the individual stories of people who’ve been hit by Iceland’s financial crisis.”

Iceland sounds like a wonderful place – some say because Christian missionaries never really made it there (too remote – hooray). So they lost a load of British investment – surely that’s what happens in a system where you expect money to accrue from just having money in the first place.  If the shit hits the fan here in some way I was planning to convince Matt to emigrate there.  But today Iceland is in shock.

“You are observing a nation in dire straits. The republic of Iceland is like a shipwreck. I think society is collapsing and the next year or two will be terrible.” (Former Foreign Minister).

“I’m ashamed to be an Icelander. how do you think my Christmas will be? My children and grandchildren – I won’t be able to give them anything.” (Man in the food queue).

“I had just normal ordinary loans – nothing I couldn’t handle … When the bank collapsed I had to sell everything and I lost everything … This is all that was left after they took my house [he lives in a camper van] It’s absolutely horrific. Threee months ago I came from a very nice house with nice new furniture and a nice new car outside – to this. This is the biggest let down of my life. Sixty years old and I come to this … When the bank collapsed I had to sell at a very low price and this was all I could afford to keep a roof over my head … You see the people lining up for food – this is the picture of Iceland today.” (A sculptor of repute, former homeowner.)

“Whereas their grandparents lived in fisherman’s huts with earth floors many of todays young Icelanders have come to expect gourmet food, high speed internet and under-floor heating. Officially this was the fifth richest country in the world – until last month. Imports, so necessary here have become almost unaffordable. 65 Icelandic kroner used to buy a dollar – now it’s 130. Thousands of people advised to take our mortgages in dollars yen or swiss francs suddenly found they owed twice as much. Shop prices are soaring. Companies are either slashing wages or laying people off at a rate of 5000 a month. The bubble has well and truly burst” (Paul Henley).

That was when I started to cry lightly over dinner preparations.

There are 1,300 families relying on the state for food handouts, and this number increases by – Jesus – 10% a week. Iceland’s only export seems to be horses. Bank debts twelve times bigger than its GDP.

When I started to cry I realised with passing interest that I was cured of the habit of thinking about affluent people that I somehow picked up when I was younger – the schadenfreude of seeing somebody get it when you are convinced they have it coming. Only a couple of years ago I remember railing against Chief Rabbi Jonathan Sacks who wrote, in his book The Dignity of Difference, that (I paraphrase) a wealthy man is tortured by sudden poverty on a scale which a man who has always known poverty could stoically endure, and should be treated accordingly. Iceland illustrates this and I understand now what he meant. The scale of the dispossession has been absolutely devastating. Icelanders are reeling.

I still have a relatively puritanical streak – I disapprove of wealth or more surplus than is required for a rainy day. But material security according to our norms is something I think we can all claim. What we owe ourselves – all of ourselves from Bahrain to Mozambique – is to make sure that those norms are at a level we can all claim.

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