The Icelandic "outvasion" ( Icelandic: ''útrás'' ) was the period in the

economic history of Iceland The economy history of Iceland covers the development of its economy from the Settlement of Iceland in the late 9th century until the present. The field of economic history in Iceland According to a 2011 review study by economic historian Gu� ...

between 2000 and the onset of its

financial crisis A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and man ...

in October 2008. With the privatisation of the

Icelandic banks The following is a list of banks in Iceland. Contemporary banks Central * Central Bank of Iceland Commercial * Arion Bank (formerly known as ''New Kaupthing'') * Íslandsbanki (formerly known as ''New Glitnir'') * Landsbankinn (formerly ...

being advantageous for investors, there was a large supply of cheap loan capital on the international market. A clause in the agreement with the

European Economic Area The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade As ...

stipulated the free flow of capital to and from

Iceland Iceland ( is, Ísland; ) is a Nordic island country in the North Atlantic Ocean and in the Arctic Ocean. Iceland is the most sparsely populated country in Europe. Iceland's capital and largest city is Reykjavík, which (along with its s ...

. The so-called outvasion entailed Icelandic financiers (sometimes styled '' útrásarvíkingar'', 'outvasion vikings') to purchase many foreign businesses, particularly in the retail sector. The British retailers

Debenhams Debenhams plc was a British department store chain operating in the United Kingdom, Denmark and the Republic of Ireland. It was founded in 1778 as a single store in London and grew to 178 locations across those countries, also owning the Danish ...

, Woolworths,

Hamleys Hamleys is a British multinational toy retailer, owned by Reliance Retail. The world's oldest toy store, it was founded by William Hamley as "Noah's Ark" in High Holborn, London, in 1760. It moved to its current site on Regent Street in London's ...

, and others came into full or part-Icelandic possession, in addition to the Danish companies

Magasin du Nord Magasin is a Danish chain of department stores. It has seven department stores with its flagship store located on Kongens Nytorv in Copenhagen. The company is a subsidiary of the German department store retailer Peek & Cloppenburg Düsseldorf, Ma ...

and

Royal Unibrew Royal Unibrew is a brewing and beverage company headquartered in Faxe, Denmark. Its brands include Ceres, Faxe, Albani, Thor, Karlens and Royal. Royal Unibrew also has a strong presence in the Baltic region, where it owns Vilniaus Tauras, Ka ...

Novator Partners Novator Partners LLP is a British private equity investment firm based in London owned by Björgólfur Thor Björgólfsson. Assets overview The company specializes in investments in companies based in emerging markets. Industries by which it fo ...

acquired telecoms and other assets around Europe, including České Radiokomunikace,

Elisa The enzyme-linked immunosorbent assay (ELISA) (, ) is a commonly used analytical biochemistry assay, first described by Eva Engvall and Peter Perlmann in 1971. The assay uses a solid-phase type of enzyme immunoassay (EIA) to detect the presen ...

, Saunalahti,

Bulgarian Telecommunications Company Vivacom ( bg, Виваком) is the largest telecommunications company in Bulgaria and a former state-owned incumbent operator. The company is headquartered in the capital city Sofia Sofia ( ; bg, София, Sofiya, ) is the capital and ...

, P4 Spółka z o.o., Netia, and

Forthnet Nova Telecommunications S.M.S.A. is a telecommunications company in Greece which provides broadband, television and fixed telephony. It also offers satellite services in Cyprus. It is traded on the Athens Exchange until its delisting in 2021. In ...

Terminology

The English term ''outvasion'' was coined by the Icelandic media as a

calque In linguistics, a calque () or loan translation is a word or phrase borrowed from another language by literal word-for-word or root-for-root translation. When used as a verb, "to calque" means to borrow a word or phrase from another language w ...

on the Icelandic term ''útrás''. ''Út'' means 'out'; ''rás'', in this context, means 'a rush, race, sprint, expansion'; and ''útrás'' correspondingly means ''outward rush''. It was used to describe the Icelandic bankers as brave Vikings raiding the world via acquiring businesses.

Investigations

In 2005 a group of Danish journalists found that Thor Björgólfsson, his father

Björgólfur Guðmundsson Björgólfur Guðmundsson (born 2 January 1941) is an Icelandic businessman and former chairman and owner of West Ham United. Björgólfur was Iceland's second wealthiest businessman worth more than a billion dollars — his son, Björgólfur T ...

and friend Magnús Þorsteinsson all have background in Russia, where they ran beverage businesses in the 1990s before moving to Iceland. They provided details about their activities in Russia. Icelandic links to Russia were also highlighted by ''The Guardian'' newspaper article "Next-generation Viking invasion - They've got the cash to buy big UK groups like M&S. But where does it come from?" in 2005. Furthermore, investigations have identified six British Virgin Islands-based shareholders behind Icelandic banks and companies such as

Glitnir Forseti (Old Norse "the presiding one", "president" in modern Icelandic and Faroese) is the god of justice and reconciliation in Norse mythology. He is generally identified with Fosite, a god of the Frisians. Name Grimm took ''Forseti'', "''pr ...

Landsbanki Landsbanki (literally "national bank"), also commonly known as Landsbankinn (literally "the national bank") which is now the name of the current rebuilt bank (here called "New Landsbanki"), was one of the largest Icelandic commercial banks that f ...

(and its Internet brand

Icesave The Icesave dispute was a diplomatic dispute between Iceland, and the Netherlands and the United Kingdom that began after the privately owned Icelandic bank Landsbanki was placed in receivership on 7 October 2008. As ''Landsbanki'' was one of ...

Kaupthing Kaupthing Bank ( is, Kaupþing banki; ) was a major international Icelandic bank, headquartered in Reykjavík, Iceland. It was taken over by the Icelandic government during the 2008–2011 Icelandic financial crisis and the domestic Icelandic b ...

Baugur Group Baugur Group (; Icelandic language, Icelandic: ) was an Icelandic investment company. The group began as a supermarket and general retail company in Iceland, before diversifying to own a number of businesses at its peak, primarily in the United Ki ...

and

Exista Klakki (known as Exista until 2011) is an Icelandic financial services group formerly listed on the Iceland Stock Exchange. Its activities are based primarily on insurance underwriting and other financial services, although it is also active in ...

: Starbook International Limited, Waverton Group Limited, Birefield Holdings Limited, Shapburg Limited, Quenon Investments Limited, and Liftwood Investments Limited. All six are registered in P.O. Box 3186 Road Town, Tortola, British Virgin Islands. Documents available on Luxembourg authorities' website and discovered by Danish journalists show that Shapburg Limited and Quenon Investment Limited owned a stake in Luxembourg-based Alrosa Finance, a subsidiary of Russian state-owned diamond company ALROSA. Shapburg Limited also owned a stake in Luxembourg-based Alfa Finance Holdings, a subsidiary of

Alfa-Bank ALFA-BANK JSC (Alfa-Bank), is the largest of the private banks in Russia. It was founded in 1990 by Russian businessman Mikhail Fridman, who is still the controlling owner today. Headquartered in Moscow, it operates in seven countries, providi ...

of Russia.

Outcomes

The Icelandic outvasion period ended in October 2008 with the downfall and default of the three leading Icelandic banks,

and

, totalling $85bn of debt, that led directly to the collapse of the national currency, the government and much of the economy. In September 2010,

Geir Haarde Geir Hilmar Haarde (; born 8 April 1951) is an Icelandic politician, who served as prime minister of Iceland from 15 June 2006 to 1 February 2009 and as president of the Nordic Council in 1995. Geir was chairman of the Icelandic Independence Pa ...

, the former prime minister, became the first Icelandic minister to be indicted for misconduct in office. He was convicted for not holding cabinet meetings when things turned critical, but has been found not guilty of negligence over the 2008 financial crisis. On December 12, 2013, Hreiðar Már Sigurðsson, former CEO of Kaupthing Bank, was sentenced to five and a half years in prison for his part in a

market manipulation In economics and finance, market manipulation is a type of market abuse where there is a deliberate attempt to interfere with the free and fair operation of the market; the most blatant of cases involve creating false or misleading appearances ...

case involving Sheikh Mohammed Bin Khalifa Bin Hamad al-Thani's purchase of a 5.1% share in

Kaupthing Bank Kaupthing Bank ( is, Kaupþing banki; ) was a major international Icelandic bank, headquartered in Reykjavík, Iceland. It was taken over by the Icelandic government during the 2008–2011 Icelandic financial crisis and the domestic Icelandic ...

weeks before the bank collapsed in October 2008. This was, at the time, the heaviest sentence for financial fraud in Iceland's history. Three other executives were also sentenced to jail. The verdict was appealed later, but the Supreme court upheld the previous verdict on February 12, 2015. Thor Björgólfsson, the former owner of

, lost most of his wealth, but personally owned up to his debt and managed to settle up with creditors. By the autumn of 2014, he regained his previous status, primarily because of the

Actavis Actavis Generics (formerly known as Watson Pharmaceuticals and Actavis plc, prior to the acquisition of Irish-based Allergan Inc) is a global pharmaceutical company focused on acquiring, developing, manufacturing and marketing branded pharmaceuti ...

acquisition by Watson Pharmaceuticals.

References

{{DEFAULTSORT:Icelandic Outvasion Economy of Iceland Great Recession in Europe Russian Mafia events