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Here comes the hangover

The Icelandic economy has taken a serious nosedive over the past few weeks. After riding high on the crest of a wave for several years, apparently it’s payback time.

Seems that overheating in the economy is to blame. Foreign reports started appearing about six weeks ago warning that the situation was not stable and criticizing the government’s economic policies. The first report was pooh-poohed by the Icelandic financial sector – they didn’t know Icelandic conditions, were not aware of the special circumstances that prevail here, blahblah. Then came another report, then another. Gradually the nation began to wake up to the old adage that where there’s smoke, there’s fire.

At the beginning of the year, the US dollar was at 62 kronur. Today it’s at 79 kronur. If that doesn’t mean much to you, let me tell you: it’s a serious shift. The krona has not been lower for the past four years. Meanwhile, stock and share prices fall and fall. Remember YT the mogul? Well, I sure wish I’d sold my shares back then, because they’re worth a helluva lot less today.

A sure sign the economy is in trouble is when gas prices go up. Sure enough, just a few days ago all the oil companies raised the price of gas per litre from ISK 117 a litre to ISK 121 per litre. Today the price went up again, to ISK 123/litre. [That’s around USD 1.50/GBP .87] As it happened I had to buy gas, and I’ve never seen the pumps as busy. It’s as though doomsday is coming f’rcryingoutloud!

Actually, what is definitely coming is rising inflation. That’s a given. Personally, though, I’m not too worried. So we’ll have to tighten our belts for a while, big deal. Also, one immediate silver lining for me is that I get paid in Euros for that interpreting job I did a few weeks back. I’m still waiting on that payment, and already my remuneration has gone up by around ISK 47,000 [USD 600/GBP 333] on account of the exchange rate. Ideally the krona would continue to nosedive until I get paid, and then climb surely and steadily upwards until I leave for my vacation in Canada. But, alas, I fear that the Icelandic economy does revolve around YT’s capricious whims, strange as it may sound.

In about 10 minutes, in fact. Tomorrow is the official First Day of Summer [Sumardagurinn fyrsti] according to the old Icelandic calendar, and as a testament to the importance of this day to the Icelandic nation, it is still a national holiday. It’s usually freezing cold – though its moniker would indicate otherwise – and in fact there is a belief attached that if winter and summer ‘freeze together’ – i.e. if there is frost during the night – then the summer will be bad weather-wise. However if there is no frost and winter and summer do not freeze together, the summer will be favourable. Sort of like Groundhog Day.

All over the city tomorrow there will be various goings-on: parades, festivals, events to suit everyone. Plus for the last three years the travel industry has appropriated this day and invited Reykjavík residents to be ‘tourists in their own backyard’ and partake in various tourism-related events at reduced prices or even free. Which YT and Co. may very well take advantage of tomorrow. We even have our eye on something Very Cool which I am loath to speak of because I’m afraid everyone in the city will want to go do this Very Cool Thing in which case the Very Cool Thing will be all filled up and the Very Cool YT and Co. will be turned away. Either that or we’ll cop out from sheer laziness and it would be really embarrassing if I’d announced to the Blogsphere at large that I was going, and then didn’t go because I was too lazy. Current temps at midnight are 3°C [looking good for the summer already]; sunrise was at 05.42 and sunset at 21.14.



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