Iceland's Warning to the World

Feb. 2, 2008— -- First came the financial crisis, then the uproar: Iceland is the first European country to suffer the full effects of the global financial crisis. Is this a taste of what's in store for the rest of the world?

It's snowing and soon it will be dark again. The evening begins here at about four o'clock in the afternoon, followed by a long, long night -- an Icelandic night here in Reykjavik, latitude 64 degrees north, just south of the Arctic Circle. If countries could export darkness, then Iceland would have nothing to worry about.

Kristin Gunnarsdottir parks her small car in front of her modest home in the city's Garbabae district, gingerly walks along the slippery path to the front door and knocks the snow off her boots. She's in the mood for some hot coffee and a seat by the fireplace. She has just returned from her new and exhausting pastime -- demonstrating. "We have to save Iceland," she says.

For the past three months, Kristin Gunnarsdottir has spent her days in downtown Reykjavik. Armed with a pot and spoon, she and her fellow protesters have taken up position in front of the Icelandic parliament, the Althing, accompanied by a few hundred or -- as is usually the case -- a couple of thousand other demonstrators.

Recently, she says, the wrath of the people was so great that the crowd was on the verge of storming the Althing, dragging out the government, and hanging them from the huge Christmas tree. The tree is no longer there.

"Some of the demonstrators torched it," she says. "That was quite a fire."

Things are heating up in Iceland as a result of the financial crisis.

Kristin Gunnarsdottir grabs a thermos full of coffee, switches on the TV and is just about to settle down by the fireplace when she is stopped short. She stands there, awestruck, and points to the screen.

Kristin is in her mid-40s, red-haired and cheerful. She used to be a TV journalist, but is now a writer. Since the beginning of the financial crisis, she has been one of the leaders of a revolt the likes of which Iceland has never seen before, a revolution from below that aims to sweep away everything that existed before.

"Incredible," she says, pointing to the television.

Foreign Minister Ingibjörg Solrun Gisladottir is being interviewed. She is from the left-leaning Social Democratic Alliance, the smaller of the two coalition partners, and looks exhausted as she gazes into the camera and explains that she will only continue to support the government if a series of demands are met. Then come politicians who say that these demands cannot be fulfilled.

"That's it," says Kristin, "I guess we won't have a government soon -- it's better that way."

A few hours later, a government that once seemed unshakable collapses. The stronger of the two coalition partners, the conservative Independence Party, ruled the country for nearly 18 years. This party led a government that was responsible for some 315,000 Icelanders who are all related to each other in one way or another and are, for the most part, very blonde, very nice, educated, pleasant people.