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Iceland's recovery in comparison to Ireland and the US


CptSternn

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Top Economists: Iceland Did It Right … And Everyone Else Is Doing It Wrong - Washington's Blog

Unlike other nations, including the U.S. and Ireland, which injected billions of dollars of capital into their financial institutions to keep them afloat, Iceland placed its biggest lenders in receivership. It chose not to protect creditors of the country’s banks, whose assets had ballooned to $209 billion, 11 times gross domestic product.

“Iceland did the right thing … creditors, not the taxpayers, shouldered the losses of banks,” says Nobel laureate Joseph Stiglitz, an economics professor at Columbia University in New York. “Ireland’s done all the wrong things, on the other hand. That’s probably the worst model.”

Ireland guaranteed all the liabilities of its banks when they ran into trouble and has been injecting capital — 46 billion euros ($64 billion) so far — to prop them up. That brought the country to the brink of ruin, forcing it to accept a rescue package from the European Union in December.
It's pretty bad when economists around the globe start using your countries most recent financial decisions as the text-book wrong thing to do in a fiscal crisis.
 

Howya

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The one advantage Iceland had was its own currency - joining the euro closed off our options (At the time it seemed like a good idea).
 

Ryan Tubbs

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The one advantage Iceland had was its own currency - joining the euro closed off our options (At the time it seemed like a good idea).
Then why are Iceland seeking to join both the EU and the Euro now?
 

PlanetBertie

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I pity Iceland, they went and saved them selves, we had Cowan and Lenihan save Eurogreedy bankers. The world looks up to us and Enda, poor Iceland, no one can name their Prime Minister.
 

CptSternn

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I pity Iceland, they went and saved them selves, we had Cowan and Lenihan save Eurogreedy bankers. The world looks up to us and Enda, poor Iceland, no one can name their Prime Minister.
No one can name our Prime Minister either sure.

 

Clanrickard

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Then why are Iceland seeking to join both the EU and the Euro now?
Are they? They have not lodge an application as far I am aware. Have you a link?
 

truthisfree

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Not bad at all, still not that clear though yet according to this I would love to see them make it through this and prove everyone else wrong and hopefully I will....
 

farnaby

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Nothing new here - it's Stiglitz and Krugman saying what they've been saying for a long time now, though perhaps in more stark terms than previously.

Not that I disagree with them, just that there are plenty of miserable scientists out there who will continue to say Ireland's doing a great job, keep applying the thumbscrews. Nothing's going to change.
 

drummed

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Are there no travellers in this story sternn?
 

Taxi Driver

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Given the reaction this generated on politics.ie



I'd love to see the reaction this generated on politics.is

 

Taxi Driver

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Average annual inflation in Iceland since 2005, %.

2005 4.0
2006 6.8
2007 5.0
2008 12.4
2009 12.0
2010 5.4
2011 4.0
2012 5.6

That is a rise in price is nearly 66% compared to 11% here. I wonder how people on fixed incomes are faring or those with savings/investments who couldn't move their money out of the country because of the continuing capital controls.
 

Taxi Driver

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Iceland general government debt, % GDP

2007 29.1
2008 70.3
2009 88.2
2010 92.8
2011 99.2

Looks familiar.
 
M

MrFunkyBoogaloo

Inflation in Iceland since 2005.

2005 4.0
2006 6.8
2007 5.0
2008 12.4
2009 12.0
2010 5.4
2011 4.0
2012 5.6


That is a rise in price is nearly 66% compared to 11% here. I wonder how people on fixed incomes are faring or those with savings/investments who couldn't move their money out of the country because of the continuing capital controls.
And yet look at it since Iceland defaulted.
 

GDPR

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Iceland is almost a unique case, over 50% of the economy and employment is in fishing and people still need to eat.

Comparisons to any normal economy are worthless, not even to mention the currency.
 

Howya

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Then why are Iceland seeking to join both the EU and the Euro now?
Because now that they have dealt with their banking problems, having learnt the lessons and have depreciated their currency, they are in a good position to do so.
 

Potatoeman

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Dec 6, 2010
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It would have benefited us to default but that would also have consequences too. All the PIGS would have followed suit leading to a sort of domino effect which would wipe out savings and pensions too.
 
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