This Bloomberg article was eye-catching.

Almost 1,200 years after Viking chief Ingolfur Arnarson left Norway to found Reykjavik, the crisis engulfing Iceland is forcing his descendants home.

"There are no jobs here," said Baldvin Kristjansson, an 18-year-old former container repairman from western Iceland, at a European job fair in Reykjavik. "I’m going to move away and go to Norway."

The Atlantic island of 320,000, suffering from its worst financial crisis since gaining independence in 1944, faces the biggest exodus in a century. Iceland’s $7.5-billion economy may shrink about 10 percent next year, according to the International Monetary Fund, which is helping provide a $4.6 billion bailout package.

About half of Icelanders aged between 18 and 24 are considering leaving the country, Reykjavik-based newspaper Morgunbladid said, citing a survey of 1,117 people between Oct. 27 and Oct. 29.

"Tens of thousands" will depart, estimated Jesper Christensen, chief analyst at Danske Bank A/S, the biggest lender in neighboring Denmark.

Iceland’s biggest wave of emigration was in the late 1800s and early 1900s. Then, 15,000 out of a total population of 70,000 left, joining a flow to North America from countries including Norway, Sweden and Ireland.

Foreign Debt

A hundred years later, Iceland’s economy is struggling after the nation’s banking system collapsed under the weight of its foreign debt last month.

Inflation surged to an 18-year high of 17.1 percent in November following a currency collapse that drove up prices. A protest against the government turned violent last week as police used pepper spray to battle activists in front of Reykjavik’s main police station.

Unemployment is forecast to rise to 7 percent by the end of January from a three-year high of 1.9 percent in October, the country’s Labor Directorate estimates.

"A lot of people are registering unemployed," said Valdimar Olafsson at European Employment Services in Reykjavik. "It’s very hectic and Icelanders are asking for jobs, especially in Norway."

Norse settlers arrived in Iceland around 874 on sail- powered wooden longships. The country came under Norwegian control in 1262 and then under Danish dominion in 1380. It gained autonomy 90 years ago yesterday and became fully independent from Denmark in 1944.

‘State of Coma’

The Danes and Norwegians, along with Germans and Poles, returned to pluck Icelandic talent at a job fair on Nov. 21 and 22. It drew 2,500 people.

Neither country has been fully spared from the effects of the global crunch. Denmark’s economy will shrink 0.5 percent next year, according to the Paris-based Organization for Economic Cooperation. Norwegian economic growth more than halved to 0.2 percent in the third quarter.

Both remain in much better shape than Iceland, though, and Norwegian and Danish companies are seeking skilled workers.

"Iceland is more or less in a state of coma," said Sigrun Thormar, who runs a consulting business for Icelanders moving eastward. "There’ll be an increase in the number of Icelanders seeking work in Denmark."

Danish unemployment is 1.6 percent. In Norway, the jobless rate rose to 1.8 percent last month from 1.7 percent the previous month. Norway’s Labor and Welfare Administration, or NAV, expects unemployment to stay below 3 percent over the next two years.

Iceland has been implementing the Schengen Agreement since 2001 and was a party to the Nordic Passport Union since 1965 long before Schengen, so there's certainly no legal or other institutional bars to Icelandic migration to the countries of mainland Norden. There's no reason why it can't take on huge proportions, either, judging by the experience of the Faroe Islands in their economic crisis of the early 1990s: "The important fishery sector collapsed (fish makes up approx. 90% of exports), the major Faroese banks went bankrupt and foreign debts were very high. Most of the many fish processing plants were closed and the Faroese economy was put under Danish administration, resulting in the concentration of most fish processing plants in one United Seafood firm. During these years, the population of the Faroe Islands declined from 48,000 to 42,000 (approx.) due to emigration." The subsequent recovery of the Faroese economy has not stemmed the outmigration, with Danish paper Politiken pointing out that twenty-three thousand Faroese live in Denmark versus the forty-eight thousand who live in the Faroe Islands. The Faroes do have a much closer relationship with Denmark than Iceland, but comparison might hold in terms of absolute numbers if not relative proportions.

Björk's performance of "Declare Independence" got her in trouble twice, when she called for a Kosovo in a Tokyo performance and more famously supported a free Tibet in a Shanghai concert. None of that comes out when you watch the video, which features Björk wearing decals of the flags of Greenland and the Faroes on either shoulder of her jumpsuit. Might that have been, as one commentator suggested, West Nordic solidarity in action?

First, an explanation. The term "West Norden" when applied to the North Atlantic region seems to have first referred to divisions within continental Norden, between an East Norden consisting of Sweden-Finland and a West Norden centered on Denmark-Norway but also including Schleswig-Holstein and the various North Atlantic holdings. Perhaps as a result of the continentalist thinking behind projects like Nordek and, later, the European Union, continental Norden might now be thought of as a whole, leaving "West Norden" to the three Nordic islands and island groups of the North Atlantic (from west to east, Greenland, Iceland, the Faroes), in the early 20th century all under Danish rule.

These three all have many points in common. All were initially settled, in the 10th and 11th centuries or so, by Norse migrants mixed with Celts, Greenland's Norse population famously becoming extinct and replaced by Inuit migrants. All three territories became relatively weak and fell under the jurisdiction of the Norwegian Crown, which in turn became weak and fell under Danish domination. When Norway suddenly switched from rule under Copenhagen to federation with Sweden, Norway's former North Atlantic possessions remained under Danish rule. Iceland and the Faroes experienced national renaissances late in the 19th century, reviving local cultural forms and languages and translating this into a desire for political self-government. The German occupation of continental Denmark in the Second World War and the use of Denmark's North Atlantic territories by the Anglo-Americans destabilized Danish rule. Self-governing Iceland gained independence in 1944. It would have been followed by the Faroes which voted for independence by a slim majority in 1946 but this was overturned by the Danish government and instead a home rule agreement was established. Greenland, with its Inuit population, followed a different trajectory, in 1953 being absorbed fully into Denmark and then in 1978 being constituted as a self-governing entity so powerful that it could secede from the European Union.

What's so fascinating about the former Danish North Atlantic to me, apart from the fact that it's relatively close to Atlantic Canada, is the extent to which cooperation between the region's sovereign and semi-sovereign governments seem to be growing. Iceland's notable success might be a model. In the informative and well-designed if occasionally terribly superficial Monocle, articles have appeared speculating as to whether or not Nuuk is going to becoming the next Reykjavik and promoting the Faroes ("THE FUNKY FAROES," the line on the masthead said, "WHALE AND GAY BASHING ARE OUT OF FASHION IN THE NORTH ATLANTIC"). As Ívar Jónsson's 1995 West-Nordic Countries in Crisis argues convincingly, these three territories are forced to use their strong dependency on natural resources in such a way as to ensure their high living standards, a task made all the more difficult by--as this May 2003 Nordic Council report argues--their relatively marginal positions in the world, in terms of their geography and their climate. It would make good sense for these three governments to share best practice, especially as climate change shakes things up.

That seems to be what's happening. For starters, there is a West Nordic Council and a West Nordic Council interparliamentary bloc. More, there have been suggestions that these governments are interesting in discussing the exchange of consulates and the establishment of regional free trade. I was rather surprised to find out about the 2005 Hoyvik Agreement, which set up free trade between Iceland and the Faroes, promoting the free movement of goods (and services and people and capital ...) across their borders and institutionalizing inter-governmental cooperation.

This may well not come to much. Björk might be in favour of independent Greenlandic and Faroese states, and the Greenlanders and Faroese might want to emulate Iceland's success, and the shared history and possible futures of the islands might encourage cooperation, but it might well not. Competition might be as likely an outcome as cooperation, and the European Union might ultimately swallow the entire region up. If nothing else, it's a trend worth keeping an eye on.

("Will Reykjavik become the capital of a Greater Iceland? Stay tuned!")

[/joke]