The current financial crisis has caused many issues around the world. In North America there has been a fairly large focus on only the United States. But, there is an even larger story of a country in financial trouble, and yes in the developed world. It is Iceland, who would have guest one of the strongest economies in Europe would just colapse.
The situation that Iceland currently is in is dire and should have greater focus. Their currency has lost 2/3 of its value over the last year. The Icelandic Stock Exchange fell over 79% in one morning in October, it did recover over the day. The government has nationalized the 3 major banks, incurring all of their debt. These banks debt is 60 billion, 10% of the USA bail out. But, their GDP is only 20 Billion, so their new debt from the banks is three times the size of their GDP. This could lead to the whole country defaulting and going into bankruptcy. This is less likely because the European Community is now working together to bail them out.
This European bailout has some interesting consequences. The most interesting is that it appears that the mood in Iceland is towards joining the EU, instead of the indifference of the past. As recently as today the Icelandic Independence Party changed the date of their next policy meeting so they can vote on whether they should support joining the EU. In a poll conducted 2 weeks ago had a 80% support for the start of the application process. It is true that this support could change with the amount of time that it would take for the process to go through. But this is remarkable when compared to 2 years ago when support was around 40%. Even if the number does go down, it still does not change the fact that 80% of the population did at one time think that it would be a good idea.
It has been said the EU will not become stronger than the USA until Switzerland, Norway and Iceland join. This might be the first sign that the EU is actually strong, and those countries will join.
The situation that Iceland currently is in is dire and should have greater focus. Their currency has lost 2/3 of its value over the last year. The Icelandic Stock Exchange fell over 79% in one morning in October, it did recover over the day. The government has nationalized the 3 major banks, incurring all of their debt. These banks debt is 60 billion, 10% of the USA bail out. But, their GDP is only 20 Billion, so their new debt from the banks is three times the size of their GDP. This could lead to the whole country defaulting and going into bankruptcy. This is less likely because the European Community is now working together to bail them out.
This European bailout has some interesting consequences. The most interesting is that it appears that the mood in Iceland is towards joining the EU, instead of the indifference of the past. As recently as today the Icelandic Independence Party changed the date of their next policy meeting so they can vote on whether they should support joining the EU. In a poll conducted 2 weeks ago had a 80% support for the start of the application process. It is true that this support could change with the amount of time that it would take for the process to go through. But this is remarkable when compared to 2 years ago when support was around 40%. Even if the number does go down, it still does not change the fact that 80% of the population did at one time think that it would be a good idea.
It has been said the EU will not become stronger than the USA until Switzerland, Norway and Iceland join. This might be the first sign that the EU is actually strong, and those countries will join.
