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Credit collapse numbs Icelanders

2008-11-20 08:11:54

By Paul Henley

BBC Radio 4's Crossing Continents

I was warned that if you do not start Icelandic cold-water swimming in the

summer, and continue regularly into winter to acclimatise yourself, it can be

dangerous.

True or not, it was a sound excuse not to join the seemingly mad Icelanders

hurling themselves into the 3.5C (38F) water of Reykjavik harbour on a pitch

dark November evening.

According to Isleifur Fridriksson, who oversees the facility, which is free and

open to the public two nights a week, this peculiarly Nordic brand of masochism

has never been more popular.

In August, before the national financial collapse with which most of the world

is now familiar, only about 30 swimmers turned up here. Recently, there have

often been over 100.

Mr Fridriksson puts the increase firmly down to the banking dramas and ordinary

peoples' need to combat rising stress levels.

"My theory is that we are so fed up with these people in suits that we want to

be where people are not wearing suits. And where is a better place than in the

ocean, where you take off your clothes?"

As a regime it could help you forget most things - you venture into the icy

night in swimming costume, psyche yourself up for a few minutes in a shallow

outdoor hot-water pool on the dockside, run the 100m or so to the sea and then

plunge in, screaming.

A middle-aged woman comes out of the waves looking very red. She assures me

there is no better antidote to recession worries.

Bleak winter

You do not have to search very hard in Reykjavik - the world's most northerly

capital city - to find personal disaster stories associated with the financial

crash.

Almost everybody I talk to in the main shopping centre had a tale to tell.

Unsurprisingly, there is not much shopping being done.

I know people who are having a nervous breakdown. Icelanders are sick and tired

of this

Woman in Red Cross line

Some analysts are predicting that inflation will reach up to 30% this winter.

Jobs are being lost at a rate of up to 5,000 a month. In a country whose entire

population is only 300,000, the impact is huge.

When the redundancy money runs out in January and February the impact caused by

the economic collapse will be felt more keenly, as thousands more homes are

re-possessed due to people falling into arrears on mortgage payments. Many of

those monthly payments doubled overnight when the value of the Icelandic Krona

crashed.

In a Red Cross hut in a working-class suburb of Reykjavik, weekly food

hand-outs are suddenly more popular.

The organiser tells me that the idea that Iceland was, until last month,

officially the fifth richest country in the world is "a joke".

Among the about 150 people waiting in line for bread, potatoes, butter and milk

are single mothers recently made redundant and pensioners who lost their life

savings overnight when the banks crashed.

"I can't even begin to imagine what it's going to be like this winter," says a

44-year-old woman whose disability allowance has just been cut.

"I know people who are having nervous breakdowns. Icelanders are sick and tired

of this."

Little protest

A common feeling that an incompetent government and a tiny handful of greedy

bankers have caused havoc for the majority has not yet translated into civil

disobedience or even mass demonstration.

More than 60% of Icelanders live in Reykjavik but barely 2% of the city's

population attended the latest weekly march through the city to protest at the

mishandling of the economy.

But, beneath the appearance of everyday calm, cracks are showing. Police report

an increase in alcohol-associated violence. A live-in refuge for women victims

of domestic violence is busier.

"We also have increasing numbers of women calling us and coming for

counselling," says Sigthrudur Gunnursdottir, who runs the refuge.

"I think it has to be linked to the economic situation of the country. And what

has changed for these women trying to get away from a violent partner is that,

whereas their main concern, before, was finding somewhere else to live, there

is now no shortage of empty accommodation but almost no jobs."

Optimism

Lara Omarsdottir and her partner, Houkur Olafsson, are cheerful in the face of

adversity.

There is a happy atmosphere in the rented, three-bedroom ground-floor flat

where they live with their five children, despite the fact that both parents

have lost their jobs within the past fortnight.

I'm prepared to fight, to start again from the beginning

Houkur Olafsson

"It is ridiculous, really, the way Icelanders got used to having lots of

things, to being rich on borrowed money," Lara says.

"We are going to change our diet, we are going to shop differently, we are only

going to use cash, no cards."

"The worst thing is we just don't know what is coming," Haukur says. "I'm

prepared to fight, to start again from the beginning. I just need a signal from

my government about what exactly to do."

The Icelandic government has just announced that it has set up a commission to

investigate joining the European Union - something that would have been

unthinkable before the crash, but which is now favoured by the vast majority of

the population, eager to welcome the luxury of a stable euro.

No deal will be struck on EU membership until agreements have been reached on

guaranteeing foreign savers' deposits in the now infamous Icelandic banks.

But ministers in Reykjavik are no doubt hoping Brussels will be the light at

the end of a very long-looking tunnel.