How Iceland Copes with a Broken Economy

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Fortunately, though, currencies in other countries have suffered as a result of the financial crisis, and Icelandic companies are now buying products there. Instead of Swiss chocolate, people are now consuming Polish candy bars.

Signs of the crisis can also be found on Laugavégur street, Reykjavik's shopping boulevard and the city's place to see and be seen. Fewer SUVs with grotesque airplane tires, so beloved by the Icelanders, can be seen plying their way down the street this fall. It could be a result of the horrendous costs of tires and gas, but perhaps it also a sign of a new environmental awareness that has caught on quickly with the trend-conscious Icelanders. In terms of fashion, the country is also reverting to simpler times. Newspaper supplements are paying adage to old Viking recipes for hair dyes made with roots and mosses, making it both fun and chic.

Indeed, it appears the Icelanders are faring better than many victims of the Viking banks would like to hear. Earlier this week, when the United Nations declared Norway to be the country with the world's highest quality of life, Iceland came in a remarkable third place. Germany, where depositors were damaged by the bankruptcy of Kaupthing (with accounts similar to those held by Dutch and British depositors in the company's Icesave subsidiary), placed 22nd. The ranking came despite the fact that a recent report by the Organization for Economic Cooperation and Development (OECD) has determined that the Icelandic economic and financial system is still lying in ruins and stated that taxes would have to be increased and public expenditures radically cut. It added that the government's own economic stimulus package had merely exacerbated the crisis.

But none of that seems to bother the Icelanders, who seem to embrace the contradictions. In the current "World Database of Happiness," the Iclanders are in first place, even ahead of the chronically happy Danes. Eric Weiner, author and publisher, explains the circumstances as such: "The Icelanders aren't perfectionists." Besides, they wouldn't listen if somebody wanted to make clear to them that they were inadequate. Instead, they just get on with things, regardless of what comes next.

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