Page last updated at 13:40 GMT, Friday, 5 March 2010

Icelanders eye chance for payback

By Jonny Dymond
BBC News, Reykjavik

Icelandic climbers
Climbers turned a little sour when the economy was mentioned

Up a snow-covered mountain, in driving hail, howling wind and in pitch darkness, climber Sigurbjorn Sigurbjornson cracks a joke.

"You stole our assets," he laughs, a little bitterly, "but we froze your asses!"

Iceland had a relatively mild winter, the UK did not.

Iceland is an outdoors kind of place. There is an awful lot of outdoors here - and Icelanders like to enjoy it, come rain or shine, in daylight or darkness.

So half-an-hour's drive north of Reykjavik, on a Wednesday evening, as the light begins to fade, 250 or so Icelanders have gathered to trek up a mountain in training for an assault on Europe's biggest glacier, Vatnajoekull, later this year.

On show on the mountainside are the qualities that have made Iceland what it is - independence, stubbornness and, let's be honest, a touch of lunacy. Who goes climbing in the dark?


When the talk turns to how the country has been treated in the financial crisis, however, the sunny disposition of the climbers turns a little sour.

"We're not terrorists!" calls out a climber. "Tell Gordon Brown!"

A woman reads a pamphlet about the referendum
Voters will decide whether to honour a deal with the UK and Netherlands

The bitterness springs from the seizure in 2008 of Icelandic assets under UK anti-terrorism legislation, something that stunned Iceland, a Nato-ally and a devout follower of Premier League football.

The seizure followed the collapse of Icesave, an Iceland-based internet bank that hundreds of thousands of Britons had put savings into as they chased what proved to be highly unrealistic interest rates.

The UK government - fearful at that time of near-panic, of a collapse of confidence in the banking system - guaranteed the savings of investors. And then it turned to the Icelandic government for compensation to the tune of £2.3bn.

The Netherlands followed suit, looking for just over £1bn.

A deal was struck with Iceland, which the parliament in Reykjavik subsequently passed, but then, buoyed by a tide of popular anger, President Olafur Grimsson rejected it.

A referendum to be held on Saturday will decide whether the deal will be honoured.

'Unfair' treatment

On the mountainside, it is the perceived unfairness of the asset-seizure, and the subsequent negotiations, that rankles most.

Gudrun Ingvarsdottur
It's like a bad dream and you just can't wake up, and every time you think you've woken up it comes again
Gudrun Ingvarsdottur

"We are very proud of independence," says one climber, "and we don't want to be bullied around, but it is tough to be the little nation and fight with the big ones."

"It is debatable about the amount we should pay," says another, "but the way that Britain acted against Iceland is really unfair."

"Many people become apes if they get money," says a third. "If they get too much of it they become apes, if they start arguing about it they become apes."

The massive debts of Icesave have hung over this tiny country - just over 300,000 people live on the island - for so long that many are deeply weary of the whole thing.

"We are not talking about Icesave and things like that," says Gudrun Ingvarsdottur. They are, says the 37-year-old architect, "banned". But why?

"We are just so tired of it," she says "It's like a bad dream and you just can't wake up, and every time you think you've woken up it comes again."


You hear a lot of that talk around Reykjavik, and it is hardly surprising.

It was a crazy idea altogether, but one logical consequence of financial globalisation. It was hubris
Stefan Olafsson
University of Iceland

Back and forth the arguments go about how many thousand pounds every Icelander will owe the British and Dutch governments.

Imagine, says Stefan Olafsson, professor of sociology at the University of Iceland, if the banks had not crashed when they did, but gone onto gather millions of customers, as was their ambition.

How much would Icelanders have owed in a few years time, if and when the banks had crashed?

"It was a crazy idea altogether, but one logical consequence of financial globalisation. It was hubris," he says.

A man urinates on photos of Icelandic bankers
Icelanders are angry about having to pay for the bankers' mistakes

After pride, the fall. But despite the tales of graduates fleeing the indebted country, there is little evidence of that happening.

And many Icelanders you meet are surprisingly upbeat about the future.

They will vote "no" by a huge majority tomorrow - "yes" voters are as rare as banking executives in Reykjavik these days.

The referendum is, as one top political insider puts it, "crazy" - Iceland has already been offered a better deal by the Dutch and British governments, so why would they approve the one on the table on Saturday?

But it will be one way for Icelanders to let the British - and to a lesser extent the Dutch - know just how badly treated they feel.

Are you in Iceland? Will you be voting in the planned referendum? Do you think Icelanders should cover the debts of the Icesave bank? Or do you think the repayment plan forces Icelandic taxpayers to pay for bankers' mistakes? Send us your comments using the form below.

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