'Iceland exits recession': Telling the Private sector to clean up its mess paid off

www.guardian.co.uk...

Iceland's decision two years ago to force bondholders to pay for the banking system's collapse appeared to pay off after official figures showed the country exited recession in the third quarter.

The Icelandic economy, which contracted for seven consecutive quarters until the summer, grew by 1.2% in the three months to the end of September.

Iceland famously agreed in a referendum to reject a scheme to repay most of its debts that were once worth 11 times its total national income.

Well it appears that Iceland which is the only European nation to actually not foot the bill for the private bankers has had their policies pay off. With their economy doing far-better than analysts and the IMF feared, a large jump in exports due to a weakened currency, and a restructuring of their financial center to correct this depression in Iceland all appeared to pay off.

Last year Iceland's president Olafur R Grímsson said: "The difference is that in Iceland we allowed the banks to fail. These were private banks and we didn't pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks."

The question I now want to ask is if Iceland is reconsidering joining the European Union now that the Euro is collapsing and the debt burdens on EU states is virtually tearing the Union apart while the Eurocrats try and seize more and more power of the nation states. Will Iceland tell the EU “no thanks” as well?

Either way Iceland did the right thing unlike Ireland and is now reaping their rewards. It was an extremely sharp decline but it paid off in the end.

Iceland debt payment referendum 2010

93.18% No
1.80% Yes

Yep. This is good news. It should get more attention. A lot of people have been saying all along it would be better to bite the bullet, let the banks fail and get it all over with.

Instead we are still as unstable as ever with no hope going forward. I think the rest of the world is going to have to face the music that there is no other way to get past this global financial mess.

Thanks for posting the info.

reply to post by wayno


We are simply dragging ourselves through our own mess after bailing out these Private banks and businesses. The government has no Constitutional right to have done that and add to that it screwed us all over while this year has been the best on record for Wall Street while Main Street is being destroyed.

Iceland was right both economically and morally that is why they will come out ahead in all of this.

I know its socialism and all but, why isn't the Government collecting the profit on these companies it essentially bought? If they are now collecting profit then why isn't it going to what should be the share holders the taxpayers that funded it. Publicly subsidized, privately profitable.

reply to post by The_Gypsy


Of course we won’t receive any return on our investment. In actuality this is not Socialism though this is in fact Corporatism and Crony Capitalism or as some might say Socialism for the Rich.

reply to post by Misoir


I meant that the Gov't turning a profit from business is socialism but, you're right it's not, it's Fascism. What we have now is corporatism. Take tax money and give it to your bankster buddies. Jerks.

reply to post by Misoir


S&F

...The way I remember it - the women took over after the collapse, and told the guys to clean up their own darn mess.

Memory is a funny thing, isn't it...

I think the real difference is that in Iceland there was a national referendum where the people made the choice about the bank bailouts. If there had been a national referendum in the US, the banks wouldn't have gotten bailed out. Probably the same for Greece and Ireland.

In Iceland, the high school graduation rate is over 90%, and the number of people who speak at least two languages is also over 90%. Great little country they have there.