Guardian: Iceland One Year On

September 28th, 2009 → 1:17 pm @

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Guardian: Iceland One Year On

It hardly seems the typical recipient of a $10bn (£6.2bn) package of bailout loans orchestrated by the IMF.
But, despite the outward signs of continued prosperity, most Icelanders are quietly waking up to the burdensome legacy they must endure after one of the most rapid destructions of wealth any economy has ever seen.
It was on 30 September last year that the Icelandic government seized control of the country’s big three banks following a run on their deposits.
Finance minister Steingrimur Sigfusson, a leftwinger who spent years warning of the need to rein in the banks, sums it up: “At the end of every good party there is a bill that has to be paid.”
IMF officials appear to have allowed the country some breathing space, but the full pain of its stringent loan conditions will be felt in a second round of heavy tax rises and public spending cuts next year.

It hardly seems the typical recipient of a $10bn (£6.2bn) package of bailout loans orchestrated by the IMF.

But, despite the outward signs of continued prosperity, most Icelanders are quietly waking up to the burdensome legacy they must endure after one of the most rapid destructions of wealth any economy has ever seen.

It was on 30 September last year that the Icelandic government seized control of the country’s big three banks following a run on their deposits.

Finance minister Steingrimur Sigfusson, a leftwinger who spent years warning of the need to rein in the banks, sums it up: “At the end of every good party there is a bill that has to be paid.”

IMF officials appear to have allowed the country some breathing space, but the full pain of its stringent loan conditions will be felt in a second round of heavy tax rises and public spending cuts next year.

From the Guardian

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