Todd Zwillich, The Takeaway: Credit at the banks have also been a story in Iceland. A different kind of credit and maybe different kind of banks, but the last time Iceland was in the headlines, Katherin, its economy was going into free fall. Late last year, the tiny country's huge banking system collapsed after years of prosperity, and in the aftermath the government fell and an interim government took over. Now with the economy still flailing, Iceland is about to hold its very first elections since the credit crisis began. So can the U.S. learn something from a country that's looking for a political solution to an absolute economic disaster? Joining us now to talk about it is Bjorn Malmquist, a reporter for the Icelandic National Broadcasting Service. He's in Reykjavik. Bjorn?
Bjorn Malmquist, Icelandic National Broadcasting Service: Good morning.
Todd Zwillich: Hi, good morning. How bad, economically, are things in Iceland right now?
Bjorn Malmquist: Depends on who you talk to. The government wants to tell us that things aren't just as bad as have been reported in recent months. The companies are screaming for lower interest rates. Companies who are making business in other countries want us to join the EU, otherwise they will move away. Unemployment is rising. And our loans, our mortgages and our loans are going up every day. So, as I said, it's a matter of perspective but things are pretty bad here.
Todd Zwillich: And let me ask just quickly, what about people's deposits. In Iceland — In this country we have an FDIC that insures people's bank deposits. I have to assume you have the same thing in Iceland. Has anyone lost money on their cash?
Bjorn Malmquist: Well, we didn't lose money on our bank deposits but a lot of people lost money on their money market accounts and a lot of people lost money on their stocks. Because a lot of people had stocks in the banks, in the three banks that toppled last winter and all those stocks are now worthless. So a lot of people lost a lot of money.
Todd Zwillich: Well it's a true crisis in Iceland. A true crisis. What has it done to the election? How is the election shaping up? It's going on tomorrow. How has the failure of the huge banking industry in this small country affected the political debate?
Bjorn Malmquist: Well the short version is, the country's leaning way to the left in the elections. All the polls indicate that.
Todd Zwillich: We in this country think Iceland is already way to the left, so even further?
Bjorn Malmquist: [laughs] Well, it's the old flurry of the European socialists, right?
Todd Zwillich: Right.
Bjorn Malmquist: Well we did have a slightly right-of-center government before the fall, social democrat by American standards. But by our standards, pro-business sort of government that had been basically in power here for the last 18 years. What's going to happen now? It's very likely that the current alliance between the Social Democrats and the Left-Green Party, which formed an interim government in February, that's probably going to continue after the elections so they will hold power for the next four years most likely. So, that's why I'm saying it's leaning to the left.
Katherine Lanpher, The Takeaway: Bjorn, some outside observers — I'm thinking of an article that was in Der Spiegel yesterday — are saying that it's not necessarily leaning to the left so much as it is leaning to the female side of the nation. That in both the banking industries and in politics there are women who are saying "look it's time for us to clean up after the old guard, who were the men who wore the same suits and went to the same schools!"
Bjorn Malmquist: That is true. The current prime minister is a woman. She is very likely to continue in that seat.
Katherine Lanpher: Johanna Siguroardottir?
Bjorn Malmquist: Johanna Siguroardottir. She is now the head of the Social Democratic Alliance. And she's one of the oldest parliamentarians in the country. And very trusted and very popular.
Katherine Lanpher: And talk about what this election is going to do in terms of the way Iceland looks at participation in the European Union. I mean there are people in the EU who are going to say, "Well, being in the EU didn't help us that much either."
Bjorn Malmquist:You know, these elections tomorrow are basically about economic policy for the next, you know, years. A major part of the discussion is whether we should join the EU. This has been talked about for years in Iceland. And the usual arguments against it is that by that we would lose control over our fishing grounds and we would possibly lose control over our energy resources, which are abundant here. But since last September, it's become more and more clear for more and more people in this country that we cannot go this alone, we need to join the EU, just in order to stabilize the economy. We cannot continue with the smallest floating currency in the world, the Icelandic Krona, which has basically been in free fall since September. So this is really the major issue in this election.
Todd Zwillich: Bjorn, can I ask a very basic question? What's voter turnout in Iceland? What percentage of people are going to vote?
Bjorn Malmquist: It's between 90 and 100 percent.
Todd Zwillich: [laughs] I'm sorry, did you say between 90 and 100 percent?
Bjorn Malmquist: I'm sorry?
Todd Zwillich: Did you say between 90 and 100 percent?
Bjorn Malmquist: Yes.
Todd Zwillich: Ask me what ours is? OK, don't ask me.
Bjorn Malmquist:I know what yours is, you don't have to tell me that. I lived in the states for four years.
Todd Zwillich: Ours is about 50, people. Bjorn Malmquist, reporter with the Icelandic National Broadcasting Service. Speaking with us from Reykjavik about Iceland's upcoming parliamentary elections on Saturday. The country is facing the worst economic crisis probably in its history.