Iceland's hangover, part I

Less than four months ago, Icelander Magnea Frodadottir * was planning a weekend Christmas shopping trip to London with a few of her girlfriends. It was just one of many trips she had taken abroad in the last couple of years. She and her husband had recently returned from a two-week vacation in Portugal, and despite rumors that Iceland's economy was not as stable as the banks and the government maintained it was, she wasn't worried. Her managerial position with one of the Icelandic banks, which in the previous couple of years had promised to make the tiny nation of just over 300,000 people a major money centre, enabled her to live a lifestyle she had not even dreamed of when she was growing up in the Reykjavik of the 1970s.

Her husband was an designer with a busy Reykjavik firm, and their combined income made weekend trips to London and Luxembourg possible, along with designer clothes, luxury autos and their latest project: remodeling the kitchen of their four year old ritzy condo near Reykjavik's new city center - not because it needed it but because Magnea wanted new Miele appliances and a specific type of Italian marble in the countertops. Paying a cleaning lady couple of times a week to keep those clean was practically pocket change.

But then last October came, and everything changed. Less than six weeks later, both Magnea and her husband were out of a job. "It happened so fast," she says, "it was unbelievable. Just a few months ago, everything seemed OK... a year ago, life was great! "

Now, life is like a bad dream, she says, a nightmare from which she hopes to wake up every day. But didn't she suspect something? Was it possible to work in the banks, in a relatively senior position and not know that things were seriously wrong?

„I guess some of us suspected that something was not right..." She hesitates. „I mean, of course people knew things were not quite right perhaps, but nothing like this! When you look back now, it's obvious that the emperor was naked riding a huge elephant in the living room, but nobody said anything. I guess we all just wanted it to be true. And you didn't want to say anything negative or second-guess your superiors, because you wanted to be loyal or not ruin your chances ...I don't know. It's like being in a dysfunctional or abusive relationship; you are unable to see the craziness when you are in it. It's only after you are out of the relationship that you see how insane it was." The couple is drawing on their savings to pay their living expenses; the cleaning lady who came to polish her Italian marble kitchen countertops is long gone. In only a few months Magnea and her husband predict they will be completely out of money. "We will have nothing," she says. "If we go on making our payments as usual, we will be utterly broke, and that will be very soon. We have a monthly mortgage, a pension fund loan, our student loans, car payments ... it'll be over very soon."

Both Magnea and her husband receive unemployment benefits, about $875 after taxes, but considering their expenses and the cost of living in Iceland, that is like a drop in the ocean. And, as is the case with many Icelanders, a portion of their luxurious lifestyle is on credit. The Euro payments on their foreign car loans skyrocketed when the krona crashed; now Magnea's entire unemployment payment doesn't even cover her monthly car payment alone. She wants to get rid of the car and the loan, but who is going to buy it?

Magnea, who has a degree in business administration from the University of Iceland and did her graduate studies in Denmark, has been unable to find another job. „There is no work here, nothing, "she says. „It is so depressing to look for work; it's the same answer everywhere. It's worse for my husband, nobody even wants to talk to him."

Like many Icelanders, they are looking for jobs in the other Scandinavian countries. „I've been looking at jobs in Denmark," she says, „because I lived there for a while and speak the language well, but the few good jobs available there are not going to go to Icelanders!" She snorts. "Icelanders, the thieves who stole the savings of innocent people! I have actually looked over job advertisements from Danish hotels for maids, cleaning people, the kinds of jobs Icelanders have been too good to do here at home, so we have brought in foreigners to do them. Now we'll be lucky to get a job scrubbing floors in a Danish B&B!"

Magnea says she worries about her husband's parents, who lost a considerable chunk of their savings and like many Icelandic retirees face cuts in their pension payments because of the losses incurred by the pension plans „That's the hardest," she says, „to see the older people who have worked so hard all their lives and saved their money. Now it's ... it's gone! I worry about them, but there is nothing we can do to help. But at least we have no children; I can't imagine the stress of having kids in this country and no job."

She says she does not ask for sympathy and realizes that many of her fellow countrymen think she and her colleagues deserve every bad luck coming to them. "It's hard to feel sorry for people who made the kind of money we were making. I don't know... We just thought it would go on forever. And now, here we are with nothing."

*Not her real name.