"Iceland: successful recovery and the non-bail-out banking myth"
Now that so many European countries are struggling, how is Iceland doing? Iceland is doing rather well, thank you. A growth of around 2% is forecasted for this year and the unemployment, though at a horrible high, from the Icelandic point of view, 8% isn’t too bad compared to the neighbouring countries. When reading about Iceland’s good standing, compared to many other countries, the usual refrain is that Iceland didn’t bail out its banks. As shown below, that’s only partially true. Iceland’s economy is indeed weighed down by the cost of its banking crisis.
Iceland’s recovery was the topic of an IMF conference in Reykjavik October 27, most appropriately at Harpa, the new concert house (and since I happened to be in Iceland I was there). Harpa was half-built when the crisis struck but instead of letting it stand as a sad reminder of the insane optimism, it’s now finished, much to the delight of the culturally gluttonous Icelanders.
Martin Wolf from the FT was there and has just published an excellent overview of some of the topics. In addition, he uses the opportunity to show-case Iceland as a good example of a country profiting from not being in the euro. One of the reasons why so many economists seem to be interested in Iceland is that they find there facts and figures to underpin their ideas. Hence, Iceland is quickly becoming all things to many economists .... Read more at http://uti.is
