What has the crisis done for me?

“Thanks to the crisis, I came to appreciate my father,” says an unemployed Viking.

“I issue fewer fines,” admits a policewoman.

“I finally have time for my family,” says a smiling businessman.

“Thanks to the crisis we are real Islanders again,” agrees a doctor.

We know who we are again

Call me Anna. There’s no need for formality. Here we all call each other by our first names – our surnames are just our father’s names, so they don’t particularly matter. Just like the Arabs, isn’t it?

Anna has grey, shoulder-length hair. Around her neck she is wearing a large piece of amber, a souvenir from a trip to the Polish coast. She has put it on specifically for our meeting. For over thirty years Anna has been a doctor working for the Icelandic national health service.

You want to talk about the crisis? When the crisis began, a man came to see me at the surgery – he was a healthy forty-year-old with thick hair and shiny fingernails. As soon as he came through the door, he started to complain that his head ached, he couldn’t sleep, and he had a pain in his side, a tight feeling under his ribs.

That was a few days after our black week in October 2008. The three biggest banks – Glintir, Landsbanki and Kaupthing – collapsed like a house of cards. As one of the journalists said, they were robbed from the inside; their owners took most of the money out of them. It looked as if the entire country would collapse at any moment.Research showed that one in three Icelanders was thinking of emigrating. From dawn to dusk we had our hands full. People were emotionally upset, so their blood pressure shot up.

So we did all possible tests on this man, and the results showed that he was as fit as the god Thor. But he went on wailing that he couldn’t sleep at night and kept being sick. And had a constant headache.

I was thinking we ought to send him for a CAT scan, but suddenly he started trying to play strange games with me. He said I must understand that his company was making workers redundant, and he was sure to be laid off, but he had three children. And so I should help him to get a state allowance.

Good grief, how furious I was! A healthy man on state support? My parents had eight children. They were farmers. My father had to work very hard from morning to night because Icelandic soil is barren. He and my mother had to stand on their heads for us to have enough to eat. My father worked to the end of his life, and if anybody had suggested state support he’d have seethed with rage.

I told him all this. But today’s young people subscribe to completely different values. Capitalism has taught them to be cunning. They’ve gotten used to having good cars, good clothes and mobile phones. Before the crisis nobody here walked – people drove everywhere in cars. And what cars! They imported the most expensive makes like Moscow oligarchs. The children were obese like in American films. Everything came to them easily, and they never had to work hard.So, when the banks started to collapse, they did everything they could to carry on doing nothing. So, this man shrugged his shoulders at my arguments, muttered something and probably went off to find another doctor.

After that, a few more people came in with similar requests until word got around that it was impossible to get me to fix anything. And they stopped.

So the undoubted merit of the crisis is that it has reminded us who we are and where we live. We are a small, bleak island in the middle of the ocean. If we want to be rich, the only way is through hard work, not scamming and financial speculation.


The crisis gave me back my father

If it weren’t for the crisis, I would still be a prat. I’d still be driving about Reykjavik in a Land Cruiser, sleeping with girls who’ve had their lips enhanced, and I’d still despise my own father. And I’m sure I’d never had managed to talk to him again before he died.

Sigurjón is thirty-six with a long beard and hair tied in a pony tail. Three times a week he goes to free yoga classes – this is how one of the non-state organisations is helping Icelanders to cope with crisis-related stress.

Now I am unemployed, but for five years I was someone. I was a financial Viking. That’s what people used to call us, and we really did feel like Vikings, except that instead of animal skins we wore suits, and we raided other countries economically.For example,we offered far higher interest rates on deposits than any bank in their country. We called it “outvasion”, “the biggest success in the history of Iceland”. If somebody had doubts, we would show them coloured graphs which clearly indicated that we had a bright future ahead of us, that we had the world at our feet, and that things could only get better. Nobody really had any doubts.

Except for my father – introverted, like most fishermen. If he ever said anything, it was about nets, fish, shoals, hooks or cutter engines. Even during our most important family gatherings he would be just waiting to slip out to the harbour on any excuse – the engine had seized up, his net hadn’t dried out. If he could have, he’d have spent days on end sitting there.

I was on better terms with my mother. I was a late child, the only one, and if anything didn’t go right for me, she would hug me, comfort me and support me. My father was made of stern stuff. You fell over? So?Get up and keep going. Don’t snivel. All his life he worked hard and he expected me to do the same.

But when I started work,Iceland was opening up its markets. Earlier on, everything here had been state-owned. Now it was all going to be private. And we were all meant to benefit from that.

My parents sent me to medical school – their dream was for their son to be a surgeon. But when I was in the third year, all my friends went off to work in business. “Medicine?” they snorted with laughter. “We’ll be importing doctors from the States and Europe. This place is going to be a world business centre,” they said. Who wouldn’t have been tempted?

A friend from high school gave me my first job. We sold people securities correlated with the credit market. I didn’t understand any of it, but it wasn’t necessary to understand anything there. We had a table from which it clearly emerged that it was impossible to lose on our securities. I did pretty well, and did further training in the evenings, so after a year I was head-hunted by another firm. I did even better there, and a year later I became a manager. That was when I bought a 100-square-metre apartment. On credit, of course.

I’ve never forgotten how everybody laughed at me at the office party because I had only bought 100 square metres – my staff already had flats that were 150 or 200 square metres in size. But – I want to stress the fact – we were the smallest pieces on that chessboard. I was only in charge of eight people, who sold our products over the phone. We were at the very bottom of the ladder, but even so, one young man in my department got himself alabaster ornaments for his bathroom from Italy. He laughed the loudest at the size of my flat, but a year after the crisis began, he attempted suicide. They only just managed to save him. He had taken out a loan in francs (“they’ll always be weaker than kronas”), and now he has to pay off half a million Euros.

My father never came to see my flat. He told my mother it was all nonsense, and that wasn’t how you earned money.

But my mother came often. I remember her look of admiration when I drew those coloured columns and tables for her, and explained why our economy would always keep growing. She even stopped nagging me about a wife and child. I kept saying I’ve got plenty of time. For now I must earn as much as possible, sow my wild oats, and then I’ll think about children. And indeed, I had girls by the cartload. They all wanted to have a boyfriend with even the mildest connection with the world of high finance.

My mother invested all her savings in those cretinous securities of mine – one and a half million kronas, which is about 10,000 Euros. She lost the whole lot. When our three biggest banks simply collapsed one after the other, I couldn’t understand any of it. Only a month earlier I’d been on a training course in London, where they said Iceland had ten times as many reserves as obligations and that no other country in the whole world was as stable.

At that point, I was afraid. I was hellishly afraid.

First, I was afraid they’d hang us. There are 300,000 of us here; everyone knows everyone, and at the time everyone was furious with the bankers. One day a friend called from a branch in central Reykjavik.

“Hide your car. Immediately!” he screamed into the phone.

“Why?” I asked.

“Some people have just set five Land Cruisers on fire in the city centre. They’re heading for your estate.”

Only later did it turn out that the burning Land Cruisers and beaten-up bankers was just a rumour.

But the world I lived in had ceased to exist. Whoever had money or a family went abroad. I stayed behind – with my apartment, debt, and no skills that could be of any use to society. There was no going back to medicine; nowadays I wouldn’t even know how to put in stitches properly.

For the first two months I just lay in bed. I didn’t pick up the mail, I didn’t answer the phone, and I ordered food over the internet. I told my mother I was in Norway, looking for a job. Lots of people were going abroad then, so she had no trouble believing me.

After two months I got out of bed and went – I still have no idea why – to the harbour. Maybe the blood of five generations of fishermen was calling out to me? Maybe whenever something gets screwed up in his life, a fisherman seeks the answer from the sea?

So I went there, sat down and started staring at the sea. I went on and on sitting there, until, like in a movie, my father appeared. And he said: “Come on.Your mother’s made some soup.”

And he held out his hand to me.

You see? My father hadn’t seen me for two months, then up he came and invited me in for soup, as if at that moment soup was the most obvious thing in the world. So, we ate it, then we ate seconds, and then we watched television together. I looked at my old man, at his hands ruined by work, and I had never felt so close to him in my entire life before.

These days I do odd jobs for a friend who shoots commercials. I carry the equipment, and I’m learning a bit of computer graphics. I managed to sell the car to a German. He bought it over the internet. I lived on the proceeds for more than a year, even though he paid a third of the purchase price.

I couldn’t sell the flat because nowadays few people in Iceland can afford it. The moment the krona fell, the cost of my loan came to 300 per cent of its original value. Luckily, the government issued a law that says the value of a loan cannot be more than 110 per cent of the value of a flat. I feel a bit odd about the fact that somebody else will have to pay for my stupidity. But I have no alternative. An expert came and valued the place, and now I pay 100,000 kronas per month, which is about 600 Euros.

In 2008, the average loan was worth 240 per cent of the value of the property. Thanks to the law that benefited Sigurjón, the Icelandic banks have amortised debts worth at least 1.6 billion dollars. The experts stress that by giving preference to the interests of citizens over the interests of the financial markets, Iceland is emerging from the crisis much faster than countries like Greece. The Fitch agency raised its ratings this year to investment level.

Because of the crisis I have more work

How this whole crisis began I can’t say. We’ve already had various scenarios offered,including the idea that we should pack up and buy a ticket for Icelandair… What do you mean, you don’t know what Icelandair is? Air Iceland, Iceland’s airline, which flies to Warsaw, too.

Basia is a fifty-eight-year-old Pole. She has a fashionable hair style (“a friend from Poland persuaded me”) and painted fingernails and toenails. She is a cleaner, working ten hours a day – five at a hotel in central Reykjavik and the other five in offices.

I found out all about it at work. I got there at six, as usual, and my manager Margret said, “Basia, kreppa, kreppa,” and did a thumbs-down to show things were bad. At first, I thought something had happened at the hotel – there had once been a situation where an American guest got drunk in the bar, lost his wallet and accused me of stealing it. Luckily, we have magnetic cards and it clearly emerged that nobody but the man himself had gone into his room, but I was desperately upset, I can tell you.

This time nothing had been lost. Margret took out her cigarettes, led me onto the terrace, and her hands were shaking as if she had a fever. And the whole time she kept saying just one word: kreppa, kreppa.

Eventually, at seven,Ania came along, a student who knows Icelandic, and she said a big bank had collapsed and that kreppa means crisis. Then, I understood it all. A month earlier our Margret had taken out a loan for a bigger flat. A twenty-year loan.

We tried to console her somehow. I told her in my broken Icelandic that there was a kreppa in Poland when communism collapsed, hyperinflation followed and from one day to the next people lost all their money. My husband worked at a ball-bearing factory, and we prayed every day for him not to be laid off.

“We survived it, and you will, too,” we said to that Margret. But I could see that didn’t comfort her, so I took Ania, and we went to clean a room that had been vacated in the night. We switched on the TV to hear what they would say, but at that point no one knew anything yet – it was all just a guessing game. If anybody had been expecting two more banks to collapse a few days later, I think they’d have been crying on TV.

Then their kreppa really started to get going. And suddenly there was no more work for the Poles. Earlier, there had been a very large number of us here, but they’d given us the worst jobs. And suddenly unemployment began to rise, and suddenly they wanted to do those worst jobs themselves.

The first to leave was Zygmunt, who worked here as a bus driver. His contract came to an end, and he simply didn’t extend it.

Then it was Zosia and Andrzej, a married couple who worked at a supermarket. They said it wasn’t worth risking their health, as it was a very stressful time.

I wrote to my son to say he’d better prepare himself. My husband was pleased, because he’s already retired in Poland, and he gets bored on his own. But my son wasn’t happy.He has small children, and the few pennies I send each month come in very handy. Ania also kept saying we should wait out the winter, and then we’d see. And she was right. In spring it turned out our hotel had more tourists than we might have expected. The krona had fallen, and suddenly people started being able to afford to come here. This year it has been crazy – they’ve taken on two extra girls for the cleaning because we couldn’t do all the work. People keep coming and going – apparently the place is fully booked until mid-November. There have always been a lot of tourists here, but now it’s complete madness. All Europe is coming here – to shop, to see the volcanoes or for fun.

I have far more work than four years ago. I earn less because the krona is now worth half as much as in 2008, but I’m not complaining. I make 10,000 a month in our money. That’s a lot? But I work at the weekends too, sometimes for twelve hours at a time. Also, life here is much more expensive. Half the money goes to my accommodation – five of us rent a place together – and food, and I divide the other half between me and my son.

It’s just a pity my husband doesn’t want to come here – I’d find him a job instantly. But he’s afraid to get on board an aeroplane.


I got a new job

For me the breakthrough moment in the crisis was when I heard our Prime Minister say, ”May God protect Iceland.” It was the sixth of October, the very start of the crisis.

At that point I thought, bloody hell, what’s God got to do with it? Is it God’s fault we’ve got this crisis? No! We’ve got it because of our politicians. Except that they didn’t feel the blame at all. Then, I thought it was time to change them. And that I should be the one to do it.

Why me? It was a time when everyone was being critical, but no one really wanted to step out of the ranks and take the lead. The politicians on the other hand were behaving as if it wasn’t a crisis, but as if somebody had been sick at a party, and everyone was pretending it had nothing to do with them.

Jón is forty-five, and for over twenty years, he was Iceland’s most popular comedian and comic actor. In 2009, he and his friends founded the Best Party, which has injected a lot of energy into the island’s fossilised political system. In his campaign, he promised free swimming pools with free towels, a polar bear for the city zoo, and also that, thanks to him, until 2020 Parliament would be a drug-free zone. “We’ll turn Reykjavik into Disneyland and every unemployed person will be able to get his picture taken for free with Mickey Mouse,” he said.

When questioned about his political skills, he said they were the highest possible because for several years he had worked at a mental hospital. Asked why he wanted to go into politics at all, he replied,: “Times are tough. I want to have a permanent job for myself and for my friends. We want to do as little as possible for the most money.”

The Best Party won the Reykjavik city council election in 2009 and gained five of the fifteen seats on the city council.

It only looked silly. In actual fact, we took the campaign very seriously from the start. And from the start, I knew we would win.

We founded the Best Party just after finishing a film called Fangavaktin (“The Prison Sdhift”). It was the cinema version of a very popular television series. In it, I played a petrol station attendant, a bald communist who mouthed off political remarks at every opportunity. He was a bittersweet character: part comical, part serious. He had a great deal in common with my father, who was a life-long committed communist with an answer to every question. Whenever a new First Secretary was appointed in Moscow, we would get his portrait from the Soviet embassy and my father would proudly hang it up in the sitting room.

I remember that in Brezhnev’s time, my mother couldn’t stand it any longer, so she threw my father and his portrait into the cellar. I was a teenager then, smoking my first cigarettes, so I used to go down to the cellar to have a smoke with Brezhnev. All of it was and is partly silly and partly serious – the cigarettes, the film, and my campaign.

Why did people vote for me? I think that message got through to them. The programme itself was silly, but it was about deadly serious matters. And it said,“Our politicians have gone so far beyond the limits of the absurd that whatever I say I’ll never catch up with them.”

It was obvious for ages that something was up. On New Year’s Day 2003, I was invited to appear on television to chat in the studio with a politician and a businessman about what lay ahead of Iceland in the near future. That was the time when the banks were handing out loans for everything without any guarantees.They were virtually forcing them on people. And I said that, in my view, we were heading for an unhappy economic situation because that wasn’t normal. The politician and the businessman shouted me down, saying that anyone who criticises loans must be an idiot and that loans are the fuel of the economy. And that I shouldn’t talk about things I knew nothing about, because they didn’t try telling me how to tell jokes, did they?

They made me look like the village idiot,but a few years later it turned out the village idiot was right.

Since Jón has been the Mayor of Reykjavik, he has been all over the media. He is famous if only for his daring costumes at the annual Reykjavik Gay Pride march. At the first one, he appeared as a drag queen. This year he was dressed in the style of Pussy Riot.

But it goes further than dressing up. Jón found the city indebted to an amount exceeding its income over five years. He raised municipal taxes and the price of electricity. He reduced the salaries for everyone employed by the city, including teachers, transport workers and officials, some by as much as twenty per cent. He stopped paying subsidies for children’s after-school music lessons. “From the Polish perspective those might seem silly things,” says Basia the cleaner. “But here they took all those cuts very badly.”

In spite of all this, most of the capital’s citizens praise Jón’s work. And his friends call him “the greatest victim of the crisis” because he swapped the fun job of a comedian for boring administration.

Ha hahahaha! The greatest victim of the crisis! That’s good, I must remember that. But I don’t feel like a victim.

Though, in fact, my predecessors had an infinitely easier time of it. The mayor’s main task was to cut the ribbon at each new building site. Everyone liked him.

Governing during a crisis is much harder. In any case, our demands only sounded comical. Take the polar bear, for example. Everyone saw that as a joke. Meanwhile, every year our hunters shoot at bears that swim here from Greenland. They kill them, although there’s no need. We could make them a nice enclosure and promote them as the city’s mascot. We could also catch them, trap them in nets and take them back to Greenland. Make a bit of a show of it, and it’ll be a tourist attraction. But the hunter mentality still prevails among us: Did something move? Shoot it! Since I’ve been mayor, I’ve regularly written to Parliament about this matter. So far to no effect.

However, Jón’s conversations with the Ministers of Health and Finance have brought results. Despite the crisis, he is building a new hospital in the centre of Reykjavik at a cost of several million Euros. Plenty of the citizens are critical of this decision.They do not think a crisis is the time to start more building projects,but Jón believes the standard of health care in Iceland still leaves much to be desired and that the hospital is essential.


I finally have time for my family

Dear Mr.Björgólfur,

I would like to know what the Icelandic crisis is like from the perspective of one of Iceland’s richest citizens. Would you be willing to meet with me to answer a few questions? (At your PA’s request, I enclosed an outline of them in this e-mail.)

Yours sincerely…

Dear Mr.Szabłowski,

I would be happy to meet, but I am no longer living in Iceland, so I will answer your questions by e-mail.

Honestly speaking, I have never been happier, now that I have less money and more quality family time. It sounds simple enough, but I had to travel a bumpy road to reach that destination.

I had a bad feeling for two or three years, but the figures kept proving me wrong.I certainly feel responsible. I was one of those best equipped to assess the situation. I was one of those who perhaps could have softened the blow if I had been fortunate enough to recognise the warning signs for what they were. I knew the weaknesses in the Icelandic economic system – the smallest independent monetary system in the world.I should have seen how incestuous the business environment in Iceland was, and I should have recognised the lack of infrastructure and the need for systemic change. In retrospect, the signs were there.

Why didn’t I say anything? Well, I overestimated the strength of the financial system as a whole. I was not alone; most bankers and economists realised the weaknesses but thought we had means of defence. I apologised to the public of Iceland for not having done enough to prevent the harmful consequences of the rise and fall of the Icelandic banking system.

Björgólfur is forty-five now. Until 2008, he was the richest Icelander – just before the crisis his wealth was valued at 3.5 billion dollars, which put him in 249th place in the world, according to the Forbes Ranking (Jan Kulczyk, the richest Pole, was recently in 463rd place). He invested in banks, new technologies and mobile phones; among others, he is the owner of the Play network, the fourth biggest mobile phone operator in Poland. It is estimated that because of the crisis his wealth was reduced to 1 billion dollars.

He made his first big money in Saint Petersburg from beer: he and his father bought a large brewery. In Russia, it was a time when the mafia was making a lot of money, and to this day his opponents make charges against him that he must have been in with one of Russian mafia organisations to be allowed to make money there.

Björgólfur has responded to these accusations many times, saying that the money he made in Russia was absolutely clean. He used it to buy Landsbanki, the oldest Icelandic bank. In 2008, Landsbanki ended up on the edge of bankruptcy and had to go into state administration.

You ask what I lost because of the crisis. I mainly lost sleep, money and respect. Out of those, I only feel bad about losing the respect that I had worked hard for.In 2010, I reached a settlement of debt with all my creditors. It’s going according to plan, but it will still be years before it is completed. I spend my time on building my family, and that is my absolute priority. But I am also focused on building my companies. The key ones are the start-ups that need to be carefully nurtured in the first ten years, such as the Play mobile network in Poland.

But the biggest lesson I learned from the crisis is that life goes on. I found out that even though the economy was crumbling and my business nearly wiped out, life continued. At a slower pace, granted, but that was welcome. In the meantime, the family has grown, so it’s good to be able to spend more time with my wife and children.


I gained peace

Because of the crisis we bring in far fewer fines. I have the data from the first half of 2008 and from the first half of this year. The number of accidents and collisions has come down by over 40 per cent.

Jóhanna has a strong handshake and dark hair in a pageboy cut. She’s forty-two and has worked for twenty years in the traffic police. She comes to our meeting by scooter. “I love it, I feel like an Italian on it,” she jokes. “Unfortunately, you can only ride it for two months of the year in Iceland. After that it’s too cold.”

Why has it come down? Do people leave their cars at home? Or travel by public transport?

No, not at all. Icelanders would rather go without their dinner than give up their cars. They say only pensioners and immigrants travel by bus in Iceland. And it’s true. There are just as many cars as before the crisis. But firstly, the drivers have noticed that if they drive according to the rules they burn up to 20 per cent less fuel, and for many people that money has significance these days. And secondly – this is the great paradox of the crisis – people are far less stressed. They’re not in a hurry.They’re not racing after God knows what. As if the collapse of those banks has allowed us all to slow down a bit. There has been a great improvement in the driving culture, for instance…


Nowadays, it’s no longer the case that the cars won’t stop for a pedestrian standing at a crossing. During the “outvasion” that wasn’t at all typical. I myself used to issue a lot of fines to drivers who virtually ran over pedestrians’ feet because they were in a hurry to get to a business lunch. And people are nicer to the police. And to each other. As if the mere fact that we have stopped thinking about money so much has freed us of a sort of burden.

But surely during a crisis people think about money more, not less?

From my observations it appears that in a crisis people don’t think about money but about food. What to give the children for supper. What to eat themselves. If they have that secured, other things don’t cause them stress.

When the crisis had only just started, my husband and I were terribly scared. He’s a lawyer, he was working for two developers, and that branch of industry was the first to go bankrupt. We seriously thought of leaving for Norway. My sister-in-law lives there; she would have helped us to find jobs. I speak Norwegian, so with a bit of luck they might even have employed me in the police because I love this work. We even laughed to think that a thousand years after our ancestors, the Vikings, sailed here and annexed the island, we would be making the journey in the opposite direction.

A lot of people did leave then. Our neighbours went to Denmark because they both went to college there and had some contacts. A friend from work went to Norway; her husband is a doctor and he found a job at a clinic in Oslo. Now both couples write to say they’re homesick, that they miss Iceland, and that perhaps they took the decision to leave too quickly.

Because this crisis actually hasn’t turned out to be quite so deep or as terrible as it was supposed to be. Unemployment rose sharply for a while, but now it is at only 5 per cent again, which means anyone who wants to work can find a job. Economic growth is at 3 per cent, in other words far higher than in the European Union. Our wages have come down a bit, but it’s enough to live on, so I’m not complaining. The state has helped people who had big loans to negotiate reduced rates with the banks.

In short, Iceland has got away with it. And we have too. I’m still working for the traffic police. And my husband has branched out and does legal analyses for airline companies.


The crisis teaches humility

All this harping on about the crisis infuriates me. We were the fifth richest country in the world; we fell to twelfth or fifteenth place and everyone’s moaning about the harm that’s been done to us.

Arni is forty and speaks Polish, as well as Icelandic because he studied at the Łódź Film School. He is a director and screenwriter, and he lectures at the Reykjavik Film School. His feature films have been shown at major international festivals, including Cannes and Karlovy Vary.

Now, he is working on a serial about the crisis, although, as he says, “finding the money for an expensive film about a crisis in a country where the crisis is happening is not easy.”

Here we have a very strong social welfare system, and people don’t quite know the meaning of a real crisis. They watch the news on plasma TV screens and weep about how poor they are. When I was a student in Poland, I sometimes used to go to the Bałuty district in Łódź. They’ve been having a crisis there non-stop for several decades! Some of the children have never seen their parents working. So, whenever an Icelander starts to complain too much, I just say,“Show a little humility.”

Here people behave like the third generation of immigrants to the United States: the grandfather set up a small shop, the father turned it into a million-dollar business, and the grandson squandered the lot and went belly up.

We’ve done exactly the same with our country.


Witold Szabłowskiis a reporter for Gazeta Wyborcza. This articlewas produced for the Next in Line project, co-funded by the European Union, and originally published in Gazeta Wyborcza. Translated by Antonia Lloyd-Jones