Iceland: downfall of ‘a foolish little nation’

Iceland’s humiliation begins at Heathrow. Try buying the currency, the krona, at Travelex and you will discover it is no longer held. “And whatever you do,” says the woman at the counter, “don’t bring any back.” The words “failed state” bring to mind ungovernable Third World hell-holes, but Iceland is a new kind of failed state, a financially failed one. Without cash from the International Monetary Fund it would be as near to bankrupt as a country can be.

From The Telegraph

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1 Response to “Iceland: downfall of ‘a foolish little nation’”


  1. 1 Vilhjalm A. February 8, 2009 at 8:22 am

    The British shouldn’t take such Schadenfreude in Iceland’s collapse. They will be in the same position in 2-5 years. At least Iceland has a well-educated, hard-working, resilient population, plus free electricity. The British are lazy and stupid and produce nothing that anyone wants to buy, to put it bluntly.
    Two-thirds of Iceland’s population can emigrate if necessary and easily be absorbed by neighboring countries. The British have nowhere to go.

    How about some more depressing news?
    “Why Iceland is bankrupt
    – The opportunity for import of goods and services is presently closed in Iceland – no foreign currency to buy them, and no credit.
    – 70% of businesses and shops are more or less insolvent.
    – 40% of households
    – Basic industries (energy production, fishing) are so indebted/leveraged that they are in reality technically bankrupt.
    – Agriculture has large debts, mostly in foreign currencies. They cannot start new companies or expand. Lower aluminum prices worldwide reduces opportunities while debts increase 100%.
    – A kilo of quota-cod costs 4000 ISK and 70% of the quota has been leveraged (i.e borrowed against).
    – Bank debts: anywhere from 20-35 billion euros
    – Icesave debts of 650 billion ISK
    – New IMF loans to be paid back (at least 3-4 billion euros), at 5% interest
    – Continuing costs of servicing national bond debts
    – Continuing costs of floating ISK at current artificial level against real value of ISK”


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