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The End of Iceland's Innocence

The Image of Iceland in the Foreign Media during the Financial Crisis

Daniel Chartier

Publication Year: 2011

In the space of a few days, one of the world’s richest and most egalitarian nations, Iceland, toppled into financial chaos and sunk into an economic, ethical, moral and identity crisis. The vast empire built by Iceland’s young entrepreneurs, the “new Vikings”—who had propelled the country to the top of wealth, equality and happiness charts—collapsed under the combined effect of the failure of its banks and astronomical debt (more than ten times the country’s gross domestic product). Iceland became, in the midst of the global economic crisis, an icon of disaster that troubles all Western countries seeking to understand how the Scandinavian model could collapse so suddenly. In this book, Daniel Chartier traces, through thousands of articles appearing in the foreign press, the fascinating reversal of Iceland’s image during the crisis. Citizens of a country now humiliated, Icelanders must deal with a number of significant issues including the quest for wealth, sovereignty, ethics, responsibility, gender and the limits of neoliberalism.

Published by: University of Ottawa Press


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pp. 9

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pp. 11-14

Until very recently, Iceland was known for its extraordinary landscapes—made up of volcanoes, geysers, glaciers, lava fields and deep fjords—and the rich cultural heritage left by descendants of the Vikings through the sagas. At the turn of the 21st century, this small country of 330,000 inhabitants surprised the West with its unprec-...

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The Research

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pp. 15-24

This book is intended to provide an analysis of the changes in Iceland’s image, through the thousands of articles appearing in the international media in 2008. It does not take a specific position on the crisis that rocked the country—a crisis that was financial and economic, but also moral, ethical and an identity crisis all in one—or delve into ...

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The Role of the Media—Dramatisation of the Crisis

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pp. 25-34

In the spring of 2008, foreign journalists reported a possible conspiracy against Iceland, led by media. This idea, which later disappeared, provided food for thought about the role of the media, its power and its ability to stir people up or calm them down in times of crisis. During the events of 2008, politicians and bankers worldwide accused ...


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pp. 37

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An Egalitarian, Progressive and Peaceful Country—An Independent Utopia

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pp. 39-46

Before the crisis, Iceland enjoyed an excellent reputation in the West, where it was seen as an egalitarian, progressive, peaceful, cultured and ecological society. Prior to and during 2008, all the foreign newspapers published articles and studies ranking Iceland at the top of international wealth, equality and happiness charts. For many ...

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The Impact of the Crisis Abroad—A General Dislike of Iceland

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pp. 47-54

For a small country, being in the headlines of world news for several weeks while one of the century’s worst global economic crises is unfolding can be quite a shock. Yet, for a number of weeks, the media was abuzz with news about Iceland, urgently releasing information, dwelling on biases and stereotypes, making assumptions and ...

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A Casualty of the Global Crisis—The First Domino to Fall

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pp. 55-59

Iceland was not the only country grappling with the downturn, which was small consolation for a nation hit so hard: as Gérard Bérubé of Le Devoir reported, ‘the market shakeout was widespread and global’.² All market watchers acknowledged that the crisis of 2008 was not like any other. Financial analysts, accustomed to market fluctuations, ob-...

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Communication Problems—An Atmosphere of Mistrust

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pp. 60-65

...problems on the part of the Icelandic government and institutions were, in part, responsible for the crisis that gripped the country. The affected its relations with both Icelanders and the international community. Sigr

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Ethics—In Great Disarray

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pp. 66-72

Since the Icelandic government had taken over the banks during the crisis and controlled the country’s financial system, the foreign newspapers seemed to make little distinction between the island’s financial institutions, political parties, politicians and various groups, lumping them all together. From the outside, it was Iceland as a whole that re-...

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Free-Thinking Artists—Björk and Olafur Eliasson

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pp. 73-77

Many foreign journalists are familiar with Iceland primarily through its artists, Björk being perhaps the best known. During 2008, the singer’s statements to the media reflected her country’s disarray, as her discourse changed from universal considerations to an appeal for national assistance. There are other major Icelandic artists as well, ...

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Humour—‘Ctrl-Alt-Del. Welcome to Iceland 2.0’

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pp. 78-82

Humour, with all the truths and revelations it conveys, fortunately made its way into some foreign media discourse on Iceland during the crisis. Humour offered a way of reporting on the turmoil, while taking a distance from it and providing a point of view that would have otherwise been unacceptable. British, Icelandic, American, ...


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pp. 85

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Numerous Warnings—A Foreseeable Collapse

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pp. 87-91

During the crisis in 2008, a number of journalists emphasized the sudden and unforeseeable nature of what happened in Iceland. A brief look back, however, will show that warnings had been coming from many different sources for months. Early in the year, the financial rating agencies issued the first warnings about Iceland by ...

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Bankruptcy—Iceland Became Synonymous with Crisis

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pp. 92-98

...‘Countries don’t go bankrupt’, declared a U.S. Citibank executive in the 1980s,² referring to emerging markets whose financial difficulties were undermining his institution. During 2008, journalists and financial analysts repeatedly stated that the sources—and consequences—of the crisis went beyond finance. They believed that a crisis of confidence ...

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Social and Economic Incest—A Closely-Knit Economy

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pp. 99-103

In all economies, social networks create confidence and encourage trading and dealing. However, in Iceland’s case, the question arises as to whether the overly close ties between politicians, some entrepreneurs and managers ultimately eroded the foundations of its ‘economic miracle’. Iceland’s financial community was described by the ...

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Davið Oddsson and the Central Bank of Iceland—Political Intervention in Economics

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pp. 104-108

On February 9, 2009, Davið Oddsson, the Chairman of the Board of Governors of the Central Bank of Iceland and former Prime Minister, published—on the Bank’s official web site—his personal response to a letter from the government asking him to resign. That move was one of many condemned by the public and financial analysts alike. Ac-...

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Arrogance—Excessive Confidence

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pp. 109-112

In reaction to the concerns raised abroad by warnings from the financial rating agencies and newspapers about the fragility of Iceland’s economy, Geir Haarde and the Icelandic banks adopted a hostile attitude. Haarde rejected judgements about Iceland’s economy, declaring in March that ‘the movements in credit markets “are totally out of ...

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Iceland’s Very Loyal Friend—Richard Portes

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pp. 113-117

Not many foreign commentators can claim to be experts on Iceland. A few academics and journalists—including David Ibison of the Fi­nancial Times—take an interest in the country, mostly through their field of expertise: economics, social issues, literature, film, tourism or sports. There are two economists, however, who have made Iceland ...

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The New Vikings—Yesterday’s Heroes, Today’s Villains

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pp. 118-128

Iceland, the land of the sagas and homeland of the Vikings, has, in part, enjoyed a dual and contradictory reputation: that of giving the Western world the most accomplished literary texts of the Middle Ages; and that of being the descendants of people who, through their aggressive warlike ways, terrorised towns and villages from Paris to ...

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Gender Issues—Women: The Antidote to the Crisis

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pp. 129-133

As the first signs of the crisis appeared, the dominant nationalistic discourse of the new Vikings gave way to the voices of Icelandic women, who are represented in the media as those who had come to the aid of their country and its economy. Iceland is known for its egalitarian values, and the crisis was an opportunity for the country to reveal the ...


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pp. 135

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Scandinavia—Our Nordic Friends

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pp. 137-142

Unlike Iceland’s highly strategic relations with Russia, its friendship with the other Scandinavian countries—based on a shared cultural and linguistic background—was marked by constraint and guilt during the crisis; yet, in the end, the friendship served the island’s interests well. Iceland’s ties with Denmark, Sweden, Norway and the Faeroe ...

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Russia—Our New Friend

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pp. 143-151

The statement by Iceland’s Prime Minister that the country was turning to Russia because it had not obtained the help requested from its traditional allies caused surprise, fear, scepticism and anger as soon as it appeared in the foreign media. Whether actual fact or mere strategy, it shook the Western world given the seriousness of the potential ...

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The Conflict with the United Kingdom—One of Us, Not One of Them

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pp. 152-160

Relations between Iceland and the United Kingdom have sometimes been strained. Both insular and claiming to be very different from other countries, they have long had a love-hate relationship which has fluctuated back and both through history. Icelanders seem cyclically compelled to confront the British, to the point where it is al-...

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Europe—Seeking Protective Shelter

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pp. 161-169

...(EU) and use the euro instead of the krona began before the fall of 2008, but gained momentum due to the crisis and became heated. Although the majority of European rules were already being applied by the island, the country’s official inclusion in the Union would herald an end to insularity, renunciation of sovereignty maintained with a ...

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A Very Small Country—Big Is Not Always Beautiful

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pp. 170-181

What is Iceland really: a state or simply one big family? Foreign journalists asked the question when they saw that Iceland’s public institutions were paralysed by the close-knit ties among people and businesses throughout the country. Michael Lewis of Vanity Fair put it very plainly: ‘[It’s] a nation so tiny and homogeneous that everyone ...


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pp. 183

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Violence—Icelanders’ Anger

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pp. 185-190

As foreign journalists reported on the first troubles and subsequent violence that shook the Icelandic capital, they expressed bafflement, sense of concern. They generally saw the anger as a healthy outburst, albeit unexpected in such a tranquil and peace-loving country. In addition, the Icelandic spirit of compromise attracted the international ...

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Returning to Traditions—Fishing, Morality and Anti-Consumerism

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pp. 191-197

It’s a familiar story: a crisis triggers a return to conservatism, which then acts as a counter-discourse. In the case of Iceland, this return was celebrated as an end to the erosion of traditional values, as frugality and fishing were once again respected as symbols of a resilience unshaken by world events. Foreign newspapers were full of testimo-...

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Irresponsibility—Who Should Pay the Price?

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pp. 198-206

Who is responsible for the financial crisis in Iceland and its repercussions abroad? Who should pay the price? Were the nation’s institutions and politicians complacent toward the new Vikings? Were the regulations governing the financial system applied with sufficient stringency? Did the entire country lack foresight? Can the blame be ...

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Humiliation—The Wounded Tiger

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pp. 207-216

Around the turn of the millennium, Iceland became a sort of success story for small growing nations: egalitarian, rich and ethical, it was seen abroad as the ‘Nordic tiger’. Its reversal of fortunes due to the crisis of 2008 thus came as a severe humiliation. Driven upward by delirious economic nationalism until the end of summer 2008, the ...


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pp. 218-226


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pp. 227-239

E-ISBN-13: 9780776619446
E-ISBN-10: 0776619446
Print-ISBN-13: 9780776607603
Print-ISBN-10: 077660760X

Page Count: 240
Publication Year: 2011