Iceland's Economic Crisis Is Over, BBC Reports

8.1.2013
Words by Paul Fontaine
Icelandic president Ólafur Ragnar Grímsson told the BBC that Iceland's emerging economy is the result of the Icelandic character.

In a new article from BBC's Newsnight, Joe Lynam points out that Iceland has experienced "10 straight quarters of shrinking GDP ... a steady run of seven quarters of growth averaging at 2.5% per annum" and unemployment down to 5%.

The president, who spoke to Newsnight, attributed none of this good fortune to government policy or foreign investment; rather, he evoked the Icelandic character.
"Essentially we're still a nation of farmers and fishermen," says Iceland's President Olafur Grimsson, who has been in office since 1996 and who has twice refused to sign legislation which would have repaid Britain the £2.3bn owed when Iceland's banking system collapsed in 2008, forcing the UK government to reimburse British savers who had Icesave accounts.

"The economy is just not an echo of banks. It's a community of people. If they don't feel strong, it doesn't matter whatever tax measure you adopt," Mr Grimsson says.

"This was shown via the referendum on the Icesave issue. Every Icelander was given a vote and got a new sense of self-worth; it made society stronger, this democratic thing helped give people empowerment."
In contrast to the president's remarks, Newsnight spoke with some Icelanders who expressed continued frustration over what they see as a lagging economy controlled mostly by banks.

"It really makes me feel angry and sad," IT specialist and reindeer hunter Theodor Magnússon said. "Because, you know, the country is made of people, the nation is made of people, and societies are made by people, for people. But now it seems like banks are running societies and that is horribly wrong."

On the bright side, the article also points out that "brain drain" - the process by which well-educated citizens emigrate from their native country - was now reversing for Iceland, and a new frontier in exporting geothermal power could also provide a much-needed boost.

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