Published May 01, 2010
HVOLSVOLLUR, Iceland – HVOLSVOLLUR, Iceland (AP) — It took Sigurdur Thorhallsson more than a decade to turn a patch of flat land wedged between glacier and ocean into a field fit to grow fodder grass. It took Iceland's Eyjafjallajokull volcano just minutes to wreck it.
Iceland's financial crisis had already tested the 41-year-old farmer's dream by driving up repayments on his bank loan. But it was a flash flood triggered by the volcanic eruption last month that devastated him.
"It was very emotional for me. You could say it broke my heart, to see it destroy my land," said Thorhallsson, using a trailer to haul away some of the tons of mud, silt and volcanic ash left behind on the field when melting glacier ice sent floodwaters racing down the mountain.
It is seemingly endless work, but Thorhallsson is stoically determined to clean up the mess. Like many other Icelanders, he's trying to salvage a better future from the wreckage of the country's recent past.
The last few years have been traumatic for this tiny North Atlantic nation of 320,000 people.
A roaring economic boom that saw Iceland produce a crop of international jet-setters with a penchant for Alpine chalets and private planes was followed in 2008 by a spectacular bust. Suddenly, affluent Iceland was an economic basket case in need of financial life support from the International Monetary Fund.
"It has been a weird time," said Valy Thorsteinsdottir, 26, who recently returned from a trip to southeast Asia that showed her just how her country's image has changed.
"Usually I'm the first Icelander people have met. You used to get, 'Iceland, that's amazing: Bjork, hot springs.' Now people say, 'Iceland? Isn't it bankrupt?'"
And just when Icelanders thought things couldn't get any worse, Eyjafjallajokull awoke with its first eruption in almost 200 years.
An initial blast last month forced 500 people temporarily from their homes in the area, 75 miles (120 kilometers) east of Iceland's capital, Reykjavik. A second, bigger eruption that began April 14 shook the global economy. Fears the drifting ash cloud could damage jet engines grounded planes across northern Europe for almost a week, stranding millions of people and costing the aviation industry almost $2 billion.
Ironically, Iceland itself was initially little affected. Ashfall and flooding hit a small, sparsely populated area, and as winds blew the ash cloud east toward Europe, Iceland's international airport stayed open, although it later closed when the wind switched direction.
But Iceland's travel industry fears the bad publicity and aviation uncertainty will hit their summer tourist season. National carrier Icelandair say bookings for April were sharply down on expectations, and hotels report a spate of canceled bookings.
Thorsteinsdottir was stuck for several days in Bangkok, and found strangers suggesting — sometimes jokingly, sometimes in anger — that the gridlock was her fault.
"When I was holding my passport at the airport, I deliberately turned it the other way so people couldn't see where I was from," she said. "I was sick of people blaming me."
It has never been easy to be an Icelander. For centuries the people of this wind-swept rock, the descendants of Vikings who settled here more than 1,000 years ago, eked out a living from fishing and from hardscrabble farms.
Their foes included the unstable land itself. There is a volcanic eruption about every five years in Iceland; the worst, in 1783, spewed a deadly cloud of toxic gas and sparked famine that killed up to a quarter of Iceland's population and tens of thousands more across Europe.
This tough history has helped produce a hardy, egalitarian people undeterred by adversity — or, looked at another way, a nation of overconfident risk-takers.
Historian Gunnar Karlsson said Iceland's isolation from bigger nations had produced "a strong national consciousness and a feeling that we had something special."
Drawing on their egalitarian side, Icelanders established one of the world's first parliaments, the 1,000-year-old Althingi. They tapped the land's geological volatility for geothermal energy to heat houses, business and year-round outdoor swimming pools. With the money they made from fishing — by the 20th century a lucrative business — they built a cozy Scandinavian social safety net. In 2007, Iceland was declared the best country in the world to live in by the United Nations.
On the other hand, Iceland produced the "Viking capitalists" who set out early in the 21st century — armed with huge loans from Icelandic banks — to conquer businesses around the world, from London's Hamley's toy store to English football club West Ham.
Soon Iceland's banking sector dwarfed the rest of the economy and the country was awash in easy credit. Teenagers could get loans to buy fancy new cars; middle-class Icelanders bought the latest designer clothes and imported electronic goods. The new super-rich drove the streets of Reykjavik in Hummers and luxury cars.
"There were more private jets parked at Reykjavik airport than planes from our domestic airlines," said travel agent Jonas Thor, 61.
"For the older generation, we wondered, 'Where is the money coming from?' We never understood. And it turned out there was no money."
As the credit squeeze tightened in 2008, Iceland's economic house of cards collapsed. The three main banks went bust within a week of one another. The national currency plummeted and a series of angry protests — dubbed the Saucepan Revolution, after the pots and pans banged by the demonstrators — ousted the country's center-right government.
Eighteen months later, signs of decay are not obvious in Reykjavik, Iceland's tidy capital city. McDonald's decamped last year, and Pizza Hut is closing all but one of its outlets. But boutiques still line the main street, there are people in the bars and restaurants.
However, unemployment is now at eight percent, up from almost nothing a few years ago, and many businesses and individuals — like farmer Thorhallsson — are struggling to pay off loans taken out in foreign currencies when the krona was at its strongest and Iceland had one of the world's highest per-capita incomes.
But for many Icelanders, the initial shock and anger have been replaced by a sense of reflection and social solidarity.
Last month the country's "truth commission" published a 2,000-page report into the financial crisis, an event greeted as cathartic. The report lays blame on bankers and politicians and may lead to criminal charges against some.
In style-conscious Reykjavik, the latest must-have garment is not a designer label, but the humble Icelandic sweater, its chunky knit and geometric patterns redolent of practicality and heritage.
And, in the economy, there are tentative signs of recovery. A new hamburger joint may not seem much cause for celebration, but in Iceland's battered state, last month's opening of Hamborgarafabrikkan — an upmarket eatery that aims to be Iceland's answer to the Hard Rock Cafe — is a good sign.
"People tell us we are brave to do this, an inspiration to others," said Johannes Asbjornsson, a TV personality — one half of the duo who host the Icelandic version of "American Idol" — who started the business. "That's a really nice thing to hear."
Some people even think Iceland — with its recent experience of direct action and truth-seeking — could show the way to a new model of democracy.
"In 10 or 20 years, when we look back as Icelanders and tell our children, we will say that the crisis is the best thing that ever happened," said Gudjon Mar Gudjonsson, a former telecoms magnate turned social entrepreneur who has founded the Ministry of Ideas, an incubator for participatory democracy. "Iceland could play a role in changing ideas about how democracy works.
"Icelanders are risk-takers," he said. "We just need to find our path. It was definitely not in banking."
Meanwhile, the volcano is still erupting. No one knows when it will stop. Clearing his land despite the threat of more ash, Thorhallsson is determined to rebuild.
"I will try to survive this," he said quietly.
"In Iceland, we are all not far from being farmers and sailors. If you look at them in every country, they are people who try to survive."