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Page last updated at 05:23 GMT, Tuesday, 21 October 2008 06:23 UK

Iceland faces immigrant exodus

Iceland's financial crisis threatens to push many migrants - mostly from Poland - back home, in what would be a further blow to the island's economy, the BBC's Ray Furlong says.

Flateyri scene
Flateyri's dwindling community heavily depends on migrants

Flateyri is just a handful of weatherboard homes and some squat warehouses perched by the fjord. When the weather is good the waters glisten in the sun, with snow-covered mountains sloping down on all sides.

It is a long way from the global financial storm that is tearing through Iceland's capital, Reykjavik. But that storm could soon be felt here, too.

The only activity in the village, apart from a small pub, is the fish processing plant - where workers from Poland, the Philippines, and Thailand pack cod fillets ready for freezing.

I don't know if the village could survive without the Poles. But I just don't like how they don't try to learn our language
Maria Kristjansdottir

"We have 36 people working for us, and only three of them are from Iceland," says Vigdis Erlingsdottir, the owner.

"Most of the workers come from Poland. We wouldn't be able to have this factory open without them. They are the base of the town.

"When I was growing up we had 350-400 people living here, now it's 200 and more than 100 of them are foreigners," Ms Erlingsdottir says.

'Going home'

It is a story that has been repeated at countless remote fishing communities in Iceland.

Vigdis Erlingsodttir
Vigdis says her business would not survive without Polish workers

As the local young people left for education and jobs in Reykjavik, the population declined - until the last few years, when an influx of migrant workers, mostly from Poland, reversed the trend.

But Iceland's economic crisis could push the migrants away again.

Janina Krzyszewska came to Flateyri three years ago. She lives with her husband and children, and has even bought a house.

"For now, my home is here, but I plan to go back to Poland in the future. Everything depends on inflation," she says.

Inflation was at 14% before the current financial turmoil, which saw Iceland's currency, the krona, plummet in value. At one stage it lost 30% of its value in a single day.

"It makes me think about going home. My brother is thinking very hard about going back to Poland, and my cousin wants to go back too," Mrs Krzyszewska says.

Bad stories

Icelanders have mixed feelings about migrant workers. This is a society that has never known large-scale immigration.

Janina Krzyszewska
Janina says she just wants to pack up and go back to Poland

A Reykjavik taxi-driver told me "there are 20,000 Poles in Iceland - and it's 20,000 too many".

The Polish consulate estimates there are 8,000 Poles here, but the comment illustrates a wider mood.

Dorota Erutkowska-Bragasson, who is married to an Icelander and works as a translator, says media reports about Poles committing rapes and thefts have soured the atmosphere.

"Icelandic children hear bad things about Polish people, maybe from their parents or somewhere. Then they come to school and they are using it, saying 'your father is a rapist' or something. It's very sad," she says.

In last year's general election a small opposition party, the Liberals, gained seats in parliament by calling for curbs on immigration.

Magnus Thor Hafsteinsson, one of its MPs, even sees the current crisis as a blessing in disguise.

"This matter of integration is very important for us Icelanders as we are a very small nation," he says.

"We are only 300,000 speaking this language which nobody else does. It's very important that we take care of our history, our background, and our language. Those are the things that make us a nation," Mr Hafsteinsson adds.

Currency limits

In Flateyri, where the migrants are so crucial, there is a more nuanced view.

Maria Kristjansdottir
Maria says the Polish community lives its separate life in Flateyri

"There's nothing for us to do here except work in the fish factory or petrol station or something, so we all want to leave to have some more education," says 19-year-old Maria Kristjansdottir, who has just moved back to the area from Reykjavik to have a baby.

"So we move away. I don't know if the village could survive without the Poles. But I just don't like how they don't try to learn our language.

"I was working at a petrol station, and they just spoke Polish to me and I didn't like that, because they're so many. They have their own community - the Polish community."

Twenty minutes' drive up the road, in the village of Sureyri, the whitewashed walls of a windswept Lutheran church give shelter to a Polish Catholic congregation.

Sureyri also relies on Polish workers to keep its fish plant in business and stop its population shrinking.

The priest, Father Piotr, spends his days driving around the scattered Polish communities.

Polish worshippers in Sureyri
Many Poles are now unable to send home remittances

"Sometimes, after Mass, people talk to me about the economic situation. These are hard times. But there's nothing we can do about it," he says.

Polish officials in Reykjavik are a bit more forthcoming. Michal Sikorski, the Polish consul, tells me Polish workers have been calling up asking for advice.

In response to the crisis, Iceland has put limits on taking foreign currency out of the country. Mr Sikorski says Poles have been unable to send home remittances - for most, the sole purpose of their stay in Iceland.

That could be a death knell for business people like Vigdis - and the dwindling communities they support.



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