Iceland's amazing recovery

Let Banks Fail Is Iceland Mantra as 2% Joblessness in Sight

Iceland let its banks fail in 2008 because they proved too big to save.

Now, the island is finding crisis-management decisions made half a decade ago have put it on a trajectory that’s turned 2 percent unemployment into a realistic goal.

While the euro area grapples with record joblessness, led by more than 25 percent in Greece and Spain, only about 4 percent of Iceland’s labor force is without work. Prime MinisterSigmundur D. Gunnlaugsson says even that’s too high.

“Politicians always have something to worry about,” the 38-year-old said in an interview last week. “We’d like to see unemployment going from where it’s now -- around 4 percent -- to under 2 percent, which may sound strange to most other western countries, but Icelanders aren’t accustomed to unemployment.”

The island’s sudden economic meltdown in October 2008 made international headlines as a debt-fueled banking boom ended in a matter of weeks when funding markets froze. Policy makers overseeing the $14 billion economy refused to back the banks, which subsequently defaulted on $85 billion. The government’s decision to protect state finances left it with the means to continue social support programs that shielded Icelanders from penury during the worst financial crisis in six decades.
Bloomberg

Its amazing how fast they survived from hard hit in 2008. They decided not to save banks, and it was right. Many countries failed as they tried to save the banks. Unemployment in Iceland is now only 4%, and even 2% seems realistic goal. Compare Spain and Greece where unemployment is over 25%.

Iceland directed all the money that was meant to save banks to various social programs. Government forced the banks to write off mortgage loans to keep purchasing power high.

Yes, they are amazing. I've been reading a lot about this and this is a simplistic statement but mainly true..."The Iceland did the exact opposite of what the USA did and they are thriving and we are not." Proof is in the pudding, eh? They let the banks fail! That's the big one, right there!

I find it amazing your other thread, the blank one, has more flags.

But yes, hats of to Iceland. To bad that wouldn't happen in the U.S.

reply to post by Thebel


My only message to leaders of the US and EU...

With two bankers in the UK just knocking them selves off, I hope the trend continues world wide.

Fair and equal exchange I'd say, their life for the lives they have stolen from others. While men and women work for use of their cash, families suffer.

If I had the baseballs there wouldn't be a banker left

Hope the amazing mods are ok with that

Amazing recovery and Iceland don't belong in the same sentence.

2nd.

reply to post by Thebel


I guess the Money from the NSA to route all internet traffic through Iceland really helped. No wonder the leader thanked Assange. Not everything is as it seems.

reply to post by Thebel


I agree, there is not very much amazing about the recovery in Iceland.
What I do find amazing is the total lack of any banker's prosecutions here in the U S.

reply to post by teamcommander


Our banking system should have been carefully monitored by the government - or perhaps that can't happen today because the banks obviously with their immunity to prosecution for major fraud, are running our governments today.

It should be remembered that the Bank of England is a private bank and not part of our government so is not answerable to the people, yet its power and say over our everyday lives is unbelievable.

The banks must not be able to switch countries cash about and dodge any implications of their wrong doing. Banks in one country need to be answerable to that country and face the law if their actions there break it. That means that their executives need to be liable and not sitting half way around the globe. We need to follow the Icelanders example because they have grown since dumping the corrupt banking systems and their success shows all countries can get rid of the web of control that is strangling us.

It will be our government and is lackies to the banks that will try to stop this action despite the fact the people who vote them in want it.

Iceland has certain unique advantages, mostly it's a nation of 300,000 people, and it's incredibly rich in natural resources. So once they'd decided to just let foreign debtors go hang and refused to pay them back, it was remarkably easy for them to get back to growing the economy.

Which just goes to prove that so long as your country is a net exporter of goods, you're going to do well.