Iceland shows the way: reject austerity

When, in September 2008, the economic and financial crisis hit Iceland – a small island in the Atlantic with 320 000 inhabitants – the impact was disastrous, as in the rest of the continent. Financial speculation bankrupted the top three banks, whose total assets were ten times higher than the country’s GDP.

They refused IMF prescriptions, let banks fail and sentenced those responsible for crisis by Salim Lamrani.

When, in September 2008, the economic and financial crisis hit Iceland – a small island in the Atlantic with 320 000 inhabitants – the impact was disastrous, as in the rest of the continent. Financial speculation bankrupted the top three banks, whose total assets were ten times higher than the country’s GDP. The net loss was 85 billion dollars. The unemployment rate increased nine times between 2008 and 2010, while before the country enjoyed full employment.

Iceland’s debt represented 900% of GDP and the national currency depreciated by 80% against the euro. The country fell into a deep recession, with a decline in GDP of 11% in two years.

Find out more at full article