Last month I wrote a post about Iceland’s economic (and political) meltdown which resulted from swapping out a successful fishing economy with a short-lived reign as the Wall Street of Western Europe – complete with U.S.-style excess and exploding financial bubble.

And now there’s something new.

Last month, Jon Gnarr, Iceland’s most popular comedian’s, and his Best Party won 34.7 per cent of the Reykjavik municipal election, and along with that, six of the 15 city council seats.

Gnarr is now the Mayor of Reykjavik, where two-thirds of Iceland’s population of about 300,000 reside.

The Best Party, whose leaders largely consist of punk rockers who promote an “anarcho- surreal” politics, was initially created as a satire.

But the people of Reykjavik voted for the the parody over business-as-usual as one way to vent their anger against Iceland’s ruling elite just two months after an official report accused the government and regulators of “extreme negligence” in the run-up to the crisis.

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Beautiful, bankrupt, volcano-spewing, Iceland should win the magical realism award of the century.

Iceland is a tiny country. It is physically the size of Kentucky, but its population of only 300,000, is roughly the same size as Pittsburgh.

In 2003, with a conservative government in power, the deregulation of finance markets came into full effect. At that time, Iceland’s three biggest banks had assets of a few billion dollars — about 100% of the country’s gross national product, and fishing was still the mainstay of the economy.

Within three years those bank assets ballooned to 140 billion, almost 1000% of the country’s gnp. Iceland had morphed into Europe’s largest hedge fund, and like those overextended funds in the U.S., the bubble simply burst.

But this time, the bubble was the country. Because it is so small, and such a high percentage of the population worked in the banking sector, the collapse affected every aspect of the economy.

Within days, Iceland was bankrupt and its currency was useless outside its borders. Icelanders mobilized in protest and ousted their government, which was clearly asleep at the wheel.

Now, 18 months later, Just days before the volcano erupted, an Iceland government “truth commission” released its 2,000 plus page investigative “Black Report” on what caused the country’s collapse and who is to blame.

In a unique move, the entire report was read aloud last week, page by page, by 45 actors who took turns reading 24 hours per day at the Reykjavik City Theater.

Even without knowing the language, it isn’t hard to tell that this isn’t gripping theater. And the event has certainly been eclipsed by the airline-disrupting Eyjafjallajokull volcano in the international press.

I, however, applaud the idea and effort of bringing the story to the people, of making the report accessible to all and bringing some comfort of understanding, however dull, to a country that is reeling from a an economic catastrophe that rivals fiction.


(added 5/22/11:  Recent New York Times magazine article on Iceland)


For the reading-hardy, here is a link to a website that hosts the English version of the report http://sic.althingi.is/

There is also a documentary on the crisis, called “Maybe I Should Have.” Here is the English language trailer.

And finally, here is the the lovely (if odd) Icelandic musician, Eliza Geirsdottir Newman, performing her song for an Al Jazeera newscaster, teaching us all how to pronounce Eyjafjallajokull. Complete with bouncing ball.