May 20, 2012

SADLY NOT EVERY NATION CAN BE A LUTHERAN ANGLOSPHERIC ISLAND:

In European Crisis, Iceland Emerges as an Island of Recovery (CHARLES FORELLE, 5/19/12, WSJ)

In 2008, Iceland was the first casualty of the financial crisis that has since primed the euro zone for another economic disaster: Greece is edging toward a cataclysmic exit from the euro, Spain is racked by a teetering banking system, and German politicians are squabbling over how to hold it all together.

But Iceland is growing. Unemployment has eased. Emigration has slowed.

Iceland has a significant advantage over stressed euro-zone countries--a currency that could be devalued. That has turned its trade deficit into a surplus and smoothed its recovery. [...]

Iceland--with its own currency, its own central bank, its own monetary policy, its own decision-making and its own rules--had policy options that euro-zone nations can only fantasize about. Its successes provide a vivid lesson in what euro countries gave up when they joined the monetary union. And, perhaps, a taste of what might be possible should they leave.

Iceland fell hard in 2008. Its engorged banking system sunk and unemployment soared. The government was jeered out of office by dispirited voters in angry street protests. Young people packed their bags. As in the euro zone, the International Monetary Fund parachuted in with a bailout.
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Posted by at May 20, 2012 9:19 AM
  

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