It's a quarter to two on Friday morning in late November, and on Laugavegur, the main drag in downtown Reykjavik, the Icelandic economic miracle is in full swing. Outside, a deep depression over the Northern Atlantic has whipped up winds so violent they can't get the Icelandair planes in at the airport. In Cafe Oliver, though, a large group from Landsbanki, one of Iceland's largest banks, is in high spirits. The revellers - hardly any of them over the age of 33 - are celebrating getting a $2.25 billion bond issue away that day.
The scene resembles post-Big Bang City bars in London during the '80s - a guy from Bank of America who helped place the bonds is swigging from a bottle of vodka, while others down pints of Viking beer. After chucking-out time at Oliver's, some revellers still haven't had enough and go off to the super-trendy Kaffibarrin round the corner. Blur's Damon Albarn once passed out on its bar two nights running and, when he came round, decided he liked the place so much he'd acquire a stake.
This sort of exuberance is a Reykjavik commonplace, as are the Laugavegur pavement pizzas the following morning. Iceland has undergone an extraordinary transformation in the past 15 years. From a dour, state-run volcanic wilderness part-girdled by the Arctic Circle, famous for its geysers, sun-free winters and belligerent cod-defending gunboats, the island has suddenly turned cool and interesting. And the world's attention has been drawn not just by its sporting and cultural exports such as Eidur Gudjohnsen and Bjork; the latter remains an acquired taste.