On Thin Ice
Can Iceland's vibrant film sector weather economic disaster?As the rest of the Scandinavian film industry looks back on a triumphant 2008, tiny Iceland wonders what hit it. The global credit crunch nearly crushed the island nation. A massive default by the country's three main banks turned Iceland from a boomtown to a basket case overnight. The stock market tanked, the currency crashed and inflation soared.
Meanwhile, Iceland's famously creative film scene has continued to produce films including Olaf de Fleur Johannesson "The Higher Force," featuring Petur Johann Sigfusson and Michael Imperioli, which Visit Films is screening at Berlin's European Film Market; Oskar Jonasson's action thriller "Reykjavik Rotterdam," or "The Sunshine Boy," a critically acclaimed documentary from local film legend Fridrik Thor Fridriksson ("Children of Nature").
But with the country in economic chaos, how long will it be before Iceland's film business feels the big chill?
"We haven't seen any effect yet, but of course, that's what we're worried about," says Laufey Gudjonsdottir, director of the Icelandic Film Center. "There's no crisis in terms of creativity and good ideas in Iceland, but we are still waiting to see if and how the economic crisis will hurt us."
The impact of the crash could be severe. The Icelandic Krona has fallen sharply against the Euro and dollar, making foreign production services more expensive. Bank financing is out of the question at the moment; Iceland's banks are still trying to work out a refinancing plan with the International Monetary Fund.
"Financing has become a lot more difficult," Gudjonsdottir says. "My biggest worry is that we won't be able to finance and produce the
3-4 films a year we need. We have a very small market. If we don't make those films, it will destroy our infrastructure. We won't be able to keep our crews."
It might be several months before it is clear how the economic crash will affect the Reykjavik film scene. At the moment, Iceland is still struggling to stay afloat and form a new government. The country won't start thinking about film again until after the worst of the crisis is passed.
But the downturn has it advantages. Labor costs have plunged with the fall of the Krona, making Iceland an attractive spot for runaway production. For the moment at least, the industry is in the unique position of having state-of-the-art production facilities combined with Romanian-level wages.
"There's been a lot of interest lately as it's an almost ideal situation for international producers," says Gudjonsdottir, adding that three major productions are currently in negotiations to shoot in Iceland. "It would be nice to have one or two big shoots this year to help fill the current gap. Our teams are very efficient, and the infrastructure is solid. For the rest, we'll just have to wait and see."