Now, this is a picture that needs more qualifications than a brain surgeon. For a start, you wouldn’t wish Iceland’s fate on any economy. Huge spending cuts are still to kick in, and a lot more pain is in store. Thor Gylfason, an economist at the University of Iceland, reckons it will take another seven to 10 years before his country recovers from one of the worst economic disasters in recent history. This will be a long, slow haul.
But landed with an almost unbearable burden, Iceland has made the load easier on itself – and it has done so by getting tough with foreign speculators who lent money to the country at their own risk. In Dublin, on the other hand, as Irish MP Stephen Donnelly puts it, “the entire Irish people were made collateral for the banking system” – and its economic performance has not been remarkably better. More than that, there is a basic point about fairness: in Ireland, keeping the markets on side was deemed to be more important than keeping people in jobs – in Iceland, the priorities have been reversed.
Donnelly says that the Icelandic example is beginning to attract interest in the Dáil and in the media. An Icelandic politician was recently interviewed by Vincent Browne, the Irish equivalent of Jeremy Paxman. In the bust countries of southern Europe they’re also starting to take notice. Last week, on the day that Portugal finally admitted it would need a bailout from Brussels, I was talking to Joana Gorjão Henriques, a journalist from Lisbon. She told me that her contacts were pasting stories about Iceland on Facebook, and that newspaper columnists were using Iceland’s case as an example that Portugal, Greece and Ireland should follow – make an allegiance and say to the EU that they won’t pay the debt.
Iceland Broke The Rules And Got Away With It (Guardian)