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Iceland Mag

Economy

Seven years ago today: the TV address which signalled the beginning of the Icelandic financial collapse

By Staff

  • The beginning of the end Then prime minister of Iceland, Geir H. Haarde, addressing the nation on TV in the evening of 6 October 2008. Photo/Stöð 2-visir.is

Today marks the seven year anniversary of a TV address by then prime minister of Iceland, Geir H. Haarde which many Icelanders have come to see as the moment which marked the beginning of the collapse of the Icelandic financial system.

A dramatic crisis meeting ends with people feeling better, no action
On the weekend of 4-5 October 2008 the prime minister held crisis meetings with his cabinet and economic advisors, members of unions and employers and representatives of the banks. Many were shocked to learn these meetings did not result in the introduction of a rescue package or dramatic actions to shore up the banks, which were widely believed to teeter on the brink of collapse.

Read more: Bankers Behind Bars: A guided walking tour through the collapse of Iceland's banking system in 2008

Shortly after 23:00 Geir H. Haarde told reporters he and the government didn‘t see the need for any specific action to respond to the crisis. The weekend long meetings had defused tensions and he felt all parties were in agreement the banks had to reign in their foreign operations and sell assets.

"The [meetings over the] weekend has produced the result that we no longer feel the need to present a special package of responses" he told reporters, according to the local newspaper Morgunblaðið, adding that he was very pleased with the weekend‘s meetings.

The final words of the "Icelandic financial miracle"
The next day, on the evening of Monday, 6 October, Geir H. Haarde addressed the nation, outlining the grave situation facing the banks, concluding with the words "God bless Iceland." These words shocked Icelanders who are not accustomed to hearing politicians ask god to bless the country or the nation. References to god are virtually absent from Icelandic politics.

Today Icelanders have been discussing this event on social media, remembering where they were when they heard the announcement. Halldór Auðar Svansson, City councilman for the Pirate Party, said in a status on his Facebook wall that at the time he was working for Kaupþing bank, where he heard the announcement, thinking "Oh well, it‘s finished."

All three big banks and the entire financial system collapsed within days of these fateful last words.

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