Iceland doth sinketh

So Iceland’s economy is the one to tank first. Pretty sombre stuff:

The party’s over for Iceland, the island that tried to buy the world
Tracy McVeigh
The Observer
Sunday October 5 2008

… Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland’s currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country’s three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won’t send any more money and supplies of foreign currency are running out.

… On Friday the queues at the banks were huge, as people moved savings into the most secure accounts. Yesterday people were buying up supplies of olive oil and pasta after a supermarket spokesman announced on Friday night that they had no means of paying the foreign currency advances needed to import more foodstuffs.

… Iceland’s cheap labour force, the Poles and Lithuanians, have left already – there’s little point in sending home such a worthless currency, and the tourist season is over. Iceland is on its own.

Like many his age, [music festival organiser Egill] Tomasson has only a vague memory of harder times, before the boom that brought Iceland the highest per capita wealth in the world. Older islanders call them the ‘Krutt-kynslotin’ – the cuddly generation. Eco-aware, earnest but pampered, they drift from organic café to bar, listening to the music of Björk and Sigur Rós, islanders who have made it big abroad. ‘They will have to get their hands dirty now,’ says chef Siggi Hall, Iceland’s answer to Gordon Ramsay, with an effusive vocabulary to match.

‘That’s good though, they are the I-generation; iPods, iPhones, everything starts with I. Well, we will have to go back to the basics now. Icelanders are risk-takers, but hard working, they will have to downsize. We will have to eat haddock and Icelandic lamb and forget these imports of goose livers and Japanese soy sauce. When everyone was extremely rich in Iceland – you know, last month, it was with money that they never have earned. Now those who were extremely rich are just normally rich, but they think they are poor. They were spoilt, spending billions.’ …

What really brought the story home for me was how the country’s currency has fallen to such a low that supermarkets there can’t afford to stock olive oil and pasta. Eating local is no longer just an ecologically sound choice.

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One thought on “Iceland doth sinketh

  1. The krona is valueless, and the country has no money with which to buy imports.
    Government leaders should be held accountable for not insuring adequate gold reserves.

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