Cleansed by the fire

Observations on Iceland

It's not every day that you touch down in a foreign country and pass a revolution on the drive between the airport and your hotel. When I passed by Reykjavik's at the end of last month, open fires were blazing and riot police were tackling a crowd of thousands with tear gas. This was once unimaginable in Iceland, a country of family, conviviality, comfort and calm. In the past, those on the streets beyond midnight in the dark winter months would normally be rushing between bars, swaddled in down and fur.

All this changed in October as the country's 300,000-odd citizens watched the three main banks, the mainstays of Iceland's economy, collapse. Unrest grew and moved on to the streets, and the demonstrations eventually brought down the government. At the beginning of this month a new prime minister took office. The land of fire and ice, island of the Vikings, is now led by the world's first openly gay premier - Jóhanna Sigurdardóttir, a 66-year-old woman.

As it happens Hördur Torfason, the main protest organiser, is also gay. In fact, he was the country's first public figure to come out. A hugely popular actor and musician, Torfason had been the housewives' pin-up - Iceland's Chris de Burgh, if you will - but after he announced he was gay, death threats forced him to leave the country briefly in 1975. He is dismayed that his peaceful protests have become violent, although, given that Iceland is in debt to the tune of £116,000 per person, the anger should not have come as a surprise.

What is unexpected is Torfason's optimism. "Young people don't miss the money," he claims. "They are glad of the opportunity to meet and talk about other things." A decade of unmitigated financial expansion, he believes, has dulled his countrymen's senses. Torfason describes a world where everyone had been keeping up with the Joneses.

Stories of families trading in their Mercedes for an Audi Q7 simply because an acquaintance had done the same are common. This behaviour contributed to the debt all Icelanders now bear, but most people are keen to point out that Iceland was never a nation of boundless profligacy. Rather, the many are now atoning for the excesses of a few.

Abreast Reykjavik's seafront sits an empty, scaffolded hulk on an expansive plot of land. This is the city's unbuilt music hall. It was to be huge, an architectural wonder - a tribute in glass and granite to Iceland's rock faces and glaciers.

Today the cranes and drills are still and silent, but Torfason's optimism is relentless. "There is a difference between 'creating' and 'presenting'," he says, referring to the capital's many galleries, boutiques and arts spaces. They may suffer during the downturn, but after the cleansing effect of financial ruin, he says: "Iceland is going to bloom."