The nation’s celebrated rags-to-riches story began in the Nineties when free market reforms, fish quota cash and a stock market based on stable pension funds allowed Icelandic entrepreneurs to go out and sweep up international credit. Britain and Denmark were favourite shopping haunts, and in 2004 alone Icelanders spent £894m on shares in British companies. In just five years, the average Icelandic family saw its wealth increase by 45 per cent.
But, as a result of the international banking crisis, the billionaires who own everything from West Ham United football club to the Somerfield supermarket chain, Hamleys toy shops and the House of Fraser, are in trouble and the country is drowning in debt.
Iceland’s cheap labour force, the Poles and Lithuanians, have left already – there’s little point in sending home such a worthless currency, and the tourist season is over. Iceland is on its own.
This will be a remarkable story when fully told: e.g., Icelanders borrowing vast sums in Japan to buy speculative securities elsewhere.
Iceland’s seen way worse stretches than this. They’ll get through it.
It’s just business.