My grandmother had an elf friend in a rock.

The elves come to me in my dreams.

I'm convinced elves do exist.

I'm professor of Folkloristics at the University of Iceland.

One of the areas of research that I've been working on

is so-called 'elves' or 'álfar',

along with 'huldufólk', 'the hidden ones',

that Icelanders are so interested in.

I can picture some kind of idea of a hidden person,

kind of looks like a human.

They have a little bit old-fashioned clothing.

They have their own society here, emotions and feelings.

They are born, grow old, and die.

I think they live in rocks.

They can show themselves if they choose to, but rarely do.

But you never know when it will happen.

You have maybe 10% say that they don't believe,

and then those that do believe is again about 10%.

But in between you have all of the rest, who are 'maybe', 'possibly',

'probably', 'who knows'.

INTERVIEWER: So if I asked you then if you think literally

that they exist?

We can't say no. Yeah, you can't say no.

They will come haunt us.

It's not that they believe,

they are worried that there might be something there

when it comes down to it, that you're not going to mess with.

My name is Pétur Matthíasson

and I'm Head of Communication with the Icelandic Road Administration.

So this is the rock that we moved, from the place where the road is,

and we moved it over here.

People thought that this might be an elf church,

and these people asked us if we could maybe move the rock.

We will look into it. Not because we believe so much in elves

at the Road Administration,

we look at is as part of our cultural inheritance.

We know that people in the Viking times were buried in mounds

which showed above the earth.

As each generation goes by,

the living memory of the people within the ground,

turns into a much more hazy idea,

about beings that live out of sight.

The nature of Iceland makes you feel really strong emotions.

A nation where your house can be destroyed by something you can't see.

We naturally try to explain these things by means of

personifying the environment.

And everyone is surrounded by nature, you see the mountains,

you see the ocean, everywhere.

The belief started because of this strong connection that we still have.

I think there is a pressure from the society as a whole,

that we are the people who believe in elves

and we should tell everybody that.

Because we have been trying to get more tourists for a long time.

I think a lot of people will say they believe in elves,

but in heart, they don't.

If we couldn't have moved it, we would have smashed it down.

It's just a rock.

Whether you believe it or not, these stories about the elves

and these creatures, they teach us to respect nature.

And the elves here are,

for the most part I think, respected.

Should the law consider the huldufólk?

Maybe not, but I think maybe the law should try to consider

what rights the nature can have,

because it doesn't really have a voice.

Even though it's quite outdated,

maybe the huldufólk is giving nature a voice.

There are people coming from countries

who've in a sense lost this connection, this magic.

In Iceland you can talk about the elves and these other worlds

to everybody and people will not lock you up.

It makes Iceland different and they like being different

to other nations, in all ways.

We want it to be like this.

It would be a nicer place to live if there were hidden people there.

Don 't you think?

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