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Financial crisis driving Icelanders into exile

By Marc Preel  /  AFP , MOSFELLSBAER

Unemployed and burdened with financial debt, Anna Margret Bjoernsdottir, pictured on March 2 at her home in Mosfellsbaer on the outskirts of Reykjavik, has decided to leave Iceland with her daughter and head to Norway.


Anna Margret Bjoernsdottir never thought she would be forced to leave her once wealthy homeland, but after 18 months of economic upheaval, she has decided to join the biggest emigration wave from Iceland in more than a century.

“I just don’t see any future here. There isn’t going to be any future in this country for the next 20 years, everything is going backwards,” lamented the 46-year-old single mother, who plans to move to Norway in June.

The former real estate agent who lost her job when Iceland’s housing market disintegrated two years ago said she feared she could soon be forced out of her large house in Mosfellsbaer, about 15km from Reykjavik.

“I don’t want to sell it,” she said, vowing to “fight to keep” the comfortable wooden dwelling she, her daughter Olavia, their cat Isolde Tinna and their dog Candit the Bandit have called home since 2004.

Bjoernsdottir is not alone in planning to leave Iceland’s economic mess behind and seek a new future abroad. Most people in Reykjavik have someone in their area who has already packed their bags and left.

Emigration has rapidly picked up speed since the island-nation’s economy crumbled in late 2008, dragged down by the collapse of its major banks. Last year it marked the largest exodus from the country since 1887.

Last year, more than 10,600 people left the country of fewer than 320,000 inhabitants, official statistics showed, with 4,835 more people moving away than immigrating.

Foreign workers, mainly Poles, who since the beginning of the decade had been drawn to Iceland’s financial miracle, were the first to leave.

Icelanders like Bjoernsdottir have not been far behind, however, with the majority heading to the country’s still prosperous Nordic neighbors, especially Norway.

“I don’t think I can offer a good future to my daughter Olavia” in Iceland, Bjoernsdottir said.

Like many other Icelanders who have seen their worlds collapse since the financial turmoil began, Bjoernsdottir’s predicament stems from the decision, on advice from her banker, to take up a loan in foreign currency.

Repayments on her loan, in yen and Swiss francs, became insurmountable after the Icelandic krona nose-dived following the banking sector implosion.

“My loans are twice as high as they were,” she said, shaking her head in disgust. “The payments keep going higher and higher, so I have to leave, I’m forced to.”

Bjoernsdottir lost her job in real estate at the end of 2008 as the crisis hammered Iceland’s economy. Since then she has picked up temporary teaching work, but that position also disappeared in September.

Analysts expect Iceland’s beleaguered economy to stabilize this year, but GDP shrank 6.5 percent last year.

Other victims of Iceland’s financial woes have ended up with one foot in and the other out of the country.

Svanbjoern Einarsson, a 44-year-old father of three, says he is trapped in the country because of an unsellable house that he does not want to abandon.

Instead, the engineer has chosen to work for six-week stretches in Norway’s oil capital, Stavanger, on the western coast, with occasional one or two-week breaks home with his family.

“It’s very difficult. When I work I forget about it, but in the evening it’s very tough,” he said.

Long term, however, he acknowledged his future may be in Norway, not Iceland.

Like many Icelanders forced into exile, Bjoernsdottir and Einarsson blame Reykjavik for the nation’s plight.

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