Today is the "pink day" here in Iceland, and actually, the whole of October is a pink month. The use of the colour pink is to raise awareness of breast cancer, as you may be familiar with from your own country.
Today Puzzled by Iceland, a new startup by two girls on maternity leave here in Iceland has launched a new product. It's a 500 piece puzzle in a new series called "Puzzled by People" and this first product is with a picture of the Mayor of Reykjavik, the comedian that got elected in protest to the old political system. But it's no ordinary picture of the mayor. It's a picture of him dressed in drag during gay pride. He's not gay though, he was just showing support to the gay rights campaign.
I congratulate them on their puzzle success, and celebrate the way the mayor challenges the conventional images and ideas people have of politicians and the political system in general.
The parliament got back together today (Oct. 1st), after a very short break. In 5 days it is two years since the Icelandic economy collapsed (read more about it in my post Surreal Reykjavík). Over 13.000 people are still unemployed or about 9% of the workforce. That maybe doesn't sound like much compared to many EU countries, but in a country where we've had to rely on imported workforce for years this is a completely new situation.
As the economy collapsed the Icelandic krona was devalued 50% affecting everything, food, clothing, consumer goods, etc. The years leading to the collapse the banks had been selling foreign loans as the rent was much lower than on Icelandic loans. But that means many families suddenly lost their income partly or in whole at the same time as the payments doubled or in some cases tripled. Icelandic loans are tied to inflation which has been 50% in the last 6 years (combined). At the same time, the house market has crumbled. This means a house costing $500.000 in 2006 financed with a loan for $450.000 is now worth $300.000 ($150.000 if you take the devaluation of the Krona into count) but the loan is around $600.000 if it was Icelandic - and maybe around 900.000 if it was in foreign currency. This meant that technically, 40% of Icelandic homes went bankrupt. The government put a freeze on foreclosures which has now ran out.
The government has tried to fix it's deficit problem with higher taxes, and companies are cutting salaries and cutting off all overtime. This means lower income, higher taxes and more expensive living costs. Those who can still make ends meet are optimistic. Those who can't are desperate. Hundreds of homes are being sold off on auctions these days. People feel it is not their fault, but the banks, as they caused the economic collapse. Still it is the banks who are now "stealing" their homes based on ridiculous claims and with no solutions offered.
There are programs offered to save the homes, but they are simply not effective enough and do too little too late. The option of handing in the keys does not exist in Iceland - you still get to keep the debt.
People are desperate and people are furious. That's why thousands gathered in front of the parliament today to protest the situation and the lack of solutions from the government. The protest today was rather hostile with eggs and tomatoes being thrown at the PMs and the government as they walked from the church where they were blessed by the priest (yep, it's still an officially protestant country) to the parliament, which is only about 10 meters away. The priest got an egg in her head leaving her ear bleeding.
Even though Iceland is still among the richest countries in the world with high education level, excellent infrastructure, longest life expectancy and lowest infant death rate, people are desperate. When they can't afford food on the table and risk losing their homes, desperation takes over. That's why this is probably going to be the toughest winter in Iceland. People gathered at the square in front of the parliament today to protest and demand some solution to save the homes. This is a video from the protests:
Next "round" of protests is next Monday. Let's hope this presses the government to find solutions for those who remain in the cold water. We can't just leave them to drown.
Feel free to ask any questions you have about Iceland and the economy. I'll try to answer as I can.
Hjörtur Smárason, an anthropologist, an internet junkie and a traveller seriously infected with insatiable curiosity. A father of five and a marketing specialist in my daily life. You can also read my blog about internet marketing: Marketing Safari.
Recent Comments