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Why doesn't Reykjavik have an underground metro system?

It really puzzles me that Reykjavik doesn't have a metro system. I know it's not the biggest city in the world but still, a metro system serves lots of people and is more practical than buses. Can an Icelander or a person who knows more about this explain this to me? Moreover, I'd be very happy if someone who speaks Icelandic could tell me in short what this video talks about: http://www.youtube.com/watch?v=RnwWK-ivL...

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