Voice 1 Hello and welcome to Spotlight. I'm Marina Santee. Voice 2 And I'm Liz Waid. This programme uses a special English method of broadcasting. It is easier for people to understand, no matter where in the world they live.
Voice 1 A number of people stand patiently in a line. The line stretches from one end of the large room to the other. It even passes through the open door. Tables fill one part of the room. On these tables are large, green, plastic boxes. The boxes are full of different kinds of food - bread, eggs, vegetables. One by one, the people in the line move towards the boxes. They take some food out of each box - some eggs, a loaf of bread, one or two pieces of meat. They place the food in a bag. They can only take enough to last them a week. Then, they turn away and begin their trip home. They walk slowly, with their eyes looking at the ground. Their faces are full of sadness. Life is hard for them.
Voice 2 You may think that these people live in a poor country. And that they have been struggling with poverty for a long time. But, this is not the case. These people are in Iceland - a small island country in the north Atlantic Ocean. And, until October 2008, Iceland was the fifth richest country in the world! Now, some of its people wait in line to receive free food from the Red Cross aid organization. What has happened? Why must many people in this rich European country now depend on aid to survive?
Voice 1 Well, the short answer is - the current global financial crisis. For some years, banks across the world were taking great financial risks. They wanted to make as much quick profit as they could. Many of these banks were in the United States. These banks borrowed huge amounts of money - often from foreign banks. Interest rates in the US rose. And the housing market suffered. However, US banks continued to lend money to people who wanted to buy houses. And many of the people who received loans were not able to pay them back. The banks already knew this. But they continued to lend out money - money that they themselves had borrowed from other banks.
Voice 2 But in August 2007,the situation in the US began to affect the global market. A number of European banks had invested in the American market. And they discovered that they had lost millions of dollars in bad investments there. They did not have enough money to manage their businesses properly. And other banks were no longer willing to lend them anything. Banks no longer trusted each other.
Voice 1 Icelandic banks had invested heavily in the US and the UK economic markets. The banking system was at the centre of Iceland's economy. So when the banks started to struggle, it affected the country very badly. By October 2008, Iceland had huge bank debts. They were 12 times bigger than the whole of Iceland's Gross Domestic Product. The GDP represents the total market value of all goods and services produced by a country in a year. So, the government had to take control of Iceland's three major banks. And, it also asked the International Monetary Fund for emergency financial help. Weeks later, the IMF promised to lend Iceland 2.1 trillion dollars in aid.
Voice 2 The crisis affected Iceland's people deeply. The island's population is only three hundred thousand. But nearly five thousand people are losing their jobs every month. Food prices are rising. Many people cannot pay for bank loans on their homes each month. So they have to find somewhere else to live - like Sveri Olafsson. Sveri was once a well-known sculptor. He made images out of wood and stone. He had a large house, a big car, plenty of money. But the banking crisis has left him with almost nothing. He now lives in an old truck that he bought with the little money he had left. He says: Voice 3 "I am 60 years old, and I have come to this? The banks destroyed my credit and everything - because they knew they were going down...I had to sell - at a very low price. This truck was the only thing I could buy to keep a roof over my head - to give me shelter. There is complete disorder in this country...the people standing in line for food - this is the picture of Iceland today." Voice 1 So, what hope is there for the island? The Prime Minister is Geir Haarde. He believes that the IMF loan will help to establish a good base for future economic recovery. He said: Voice 4 "With the IMF aid we can get the technical help we need with our economy...this will provide support in developing a healthier financial system." Voice 1 But some people believe that help should come from another direction. They think that Iceland should become members of the European Union. They are sure that this would help to calm Iceland's economy. For example, fishing was once at the centre of Iceland's economy. And with the EU's help, it could return to this traditional way of making money. Jon Balvin Hannibalsson is a former foreign minister. He says: Voice 5 "We have to start again. But Iceland is only a small nation. And using our own kind of money- the Krona - is a very bad idea. We have had enough - it is finished. And there is only one way out - to become members of the European Union." Voice 1 But other people disagree. They believe that joining the EU would destroy the Icelandic fishing industry. They say that other Europeans would be able to fish in their waters. And so the profits would be shared. Iceland could not survive on the fishing trade alone.
Voice 2 Whatever happens, there are more difficult times ahead for Icelandic people. But they still believe that things will get better. Houkur Olafsson recently lost his job in a computer company. But he has not lost hope. He says: Voice 6 "It is hard to believe that anyone can live here - on an island in the darkest north! But we have a responsibility to stick together... this has made Iceland the country it is today...And I think that we can do that again." Voice 1 Do you have any stories about how the global financial crisis is affecting your country? Write and tell us. Our e-mail address is: radio @ english . net.
Voice 2 The writer and producer of today's programme was Ruby Jones. The voices you heard were from the United Kingdom and the United States. All quotes were adapted and voiced by Spotlight. You can hear this programme again on our website. The address is http://www.radio.english.net. This programme is called "Iceland's Financial Crisis".
