Archie Bland: Reykjavik is glad the 'ghosts' have gone

Reykjavik Notebook: Bars and restaurants once frequented by a wealthy elite are now much quieter

One of the standard images of financial crisis is of a deserted city centre, and so it's not surprising that a good number of articles about the meltdown that hit Iceland when its banks collapsed in October 2008 should focus on the idea of Reykjavik, once a cosmopolitan hub of conspicuous consumption, turning into an urban wasteland. It's natural enough to expect a city that came to embody economic adventurism as much as Wall Street or the Square Mile to feel a bit like New York or London, and when visiting reporters found it didn't, they often surmised that the place was a shadow of its former self.

The thing is, the people who live in Reykjavik, pictured, don't necessarily agree. Perhaps, they suggest, outsiders forget a straightforward fact that informs the city's identity just as much as its capital status: slightly fewer than 120,000 people live here. This is an undoubtedly lovely place. But it's also the size of Rotherham – and a Rotherham transplanted to an icy patch of tundra 650 miles further north. For a lot of Reykjavik residents, there's something more than a bit insulting about the idea that a city that doesn't precisely resemble our own capital must be in relentless decay.

"The truth is, Reykjavik has always felt small," says Olafur Jonsson, a doctor who has lived there all his life. "It's true that the place changed in the last decade. But it was never like being on Oxford Street."

As Jonsson suggests, there's no question that things have changed here. Bars and restaurants once frequented by a wealthy elite are now much quieter. But for a city that rather resented that parallel population, even this is not necessarily a bad thing. "No one misses them, however much they spent," says Jonsson. "Those people were like ghosts."

I feel I must know you...

Another adjustment for the Londoner to make on arrival in Iceland: a naming convention that makes it seem like you must know people you've never seen before in your life. Rather than surnames, a given name is appended with that of a parent and the suffix –son or –dottir, depending on gender. The result is that every introduction feels like a reminder of an old friend. "This is Lilja, Gunnar's daughter," someone will say, and the displaced Brit half expects to be told the street they grew up on and their favourite hobbies, too.

From Iceland to an icy land

My proudest achievement in four days in Reykjavik was probably not falling over once, in spite of totally inadequate footwear. But I hadn't counted on the treacherous conditions back here. As I climbed the icy steps to my front door at the end of the journey home, I lost my footing and ended up flat on my face. It comes to something when our streets are more snowbound than a country named for its wintry weather.

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