Iceland was not the country hardest hit by the global financial crisis in 2008. Its unemployment rate didn’t rise higher than in the United States or the United Kingdom, and its national budget cuts were not been greater than cuts made by some other European countries. Nonetheless, as Professor Daniel Chartier points out in his 2010 book, Iceland’s Fall From Innocence: The Image of Iceland in the Foreign Media during the Crisis, this island in the North Atlantic home to roughly 300,000 people, was the first to fall, and quickly became the poster child for the global economic crisis.
In his book, which is based on thousands of articles appearing in the foreign media in 2008, Daniel Chartier sheds light on why Iceland was plastered in newspapers all over the world as a symbol of the crisis. He explains why when Lehman Brothers fell in the United States, it was the bank that fell, but when Landsbanki fell in Iceland, it was the country that fell. “It’s a crisis that cannot be explained in financial terms,” Daniel said when I interviewed him in 2010. “When I explain it to people at home [Canada] and I cite the numbers, people say, well we have been living with 10% unemployment for the last fifty years and we are a rich nation, so what’s the problem?” The problem, according to Daniel, was the fact that Iceland’s image in the foreign discourse nosedived in the span of two months.
News of the banking crisis had a profound effect because, after “the Icelandic government spent a decade building up an image with delirious nationalist discourse,” as Daniel put it, Iceland had come to represent many things to many people. “For many foreigners,” he writes, “Iceland represented a model, an ideal, almost a utopia, that seemed unshakable. So much has been written about Iceland’s qualities—its integrity, openness, prosperity, resilience and balance—that the country enjoyed an embellished reputation.” This made the fall all the more humiliating and worthy of the media spotlight. Almost over night, Iceland became a bankrupt nation of dim-witted businessmen, a nation branded as terrorists by the United Kingdom and rejected by its fellow Scandinavian “friends,” as Icelanders often refer to them.
Indeed, Iceland was rudely awakened with the realization that its highly regarded self-image had been smashed. For the first time, Chartier says, the country was making headlines in foreign papers for all of the wrong reasons. “The change was so drastic,” Chartier said. “It would be like if people were to wake up one morning and everything they thought was normal had just disappeared. When you lose that, you lose a lot.” More than just an economic crisis then, Chartier deduces from the foreign discourse that Iceland suffered from a profound crisis of identity. At the root of it, the nation’s incessant need to prove itself: “Why else was it important for Icelandic businessmen to own companies abroad and to own a football team in London?” he asked, rhetorically. “It’s not just the money. It’s what Iceland was looking for, which was to be liked.” Hence the famous question asked of visitors: “So, how do you like Iceland?”
“This is now part of Iceland’s history,” Chartier said when I spoke to him in 2010. “You cannot erase the discourse, but you can add to it.” In that spirit, Chartier said he hoped if Icelanders took anything from his book, that they learned to “let things go about on the outside and manage from the inside so as not to build an image that is different from the reality.”