City Life | 11 October 2008

When the credit crunch first hit, Icelanders blamed everyone but themselves: international banks for their loss of faith, hedge-funders in London for betting on the country going bankrupt. Seven months later, though, with its current troubles and the recent central bank rescue of Glitnir, Iceland’s third largest bank, the mood is one of anger amid the dawning realisation that perhaps Iceland’s own politicians and bankers may have played a part in the crisis all along. In bars and restaurants along Laugavegur, Reykjavik’s main shopping street, people are critical of Geir Haarde, the Prime Minister of a beleaguered coalition, while his finance minister, Arni Mathiesen, whose only qualification to a knowledge of high finance would appear to be a masters degree in fish pathology from the University of Stirling, risks becoming a national joke. In an emotional policy statement earlier this month, Haarde assured his countrymen that for centuries they have shown stamina in the face of adversity, but for ordinary Icelanders, facing rocketing inflation, increased debt and the value of the Icelandic crown in freefall, group therapy isn’t enough.