Iceland's Viking Victory

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I Can't Hear Poors
Iceland's Viking Victory

Telegraph UK

Ambrose Evans Pritchard

February 17, 2012

Congratulations to Iceland.

Fitch has upgraded the country to investment grade BBB – with stable outlook, expecting government debt to peak at 100pc of GDP.

The OECD's latest forecast said growth will be 2.4pc this year, after 2.9pc in 2011.

Unemployment will fall from 7pc last year to 6.1pc this year and then 5.3pc in 2013.

The current account deficit was 11.2pc in 2010. It will shrink to 3.4pc this year, and will be almost disappear next year.

The strategy of devaluation behind capital controls has rescued the economy. (Yes, I know there is a dispute about exchange controls, but that is a detail.) The country has held its Nordic welfare together and preserved social cohesion. It is slowly prospering again, though private debt weighs heavy.

Nobody is forcing the elected government out of office or appointing technocrats as prime minister. The Althingi sits untrammeled in its island glory, the oldest parliament in the world (930 AD).

The outcome is a vindication of sovereign currencies and national central banks able to respond to shocks.

The contrast with the unemployment catastrophe and debt-deflation spirals across Europe's arc of depression is by now crystal clear. Those EMU shroud-wavers who persist in arguing that exit from the Europe would be suicidal will have to start coming up with a better argument.

Is it now so clear the Iceland will join the EU and the euro? Don't bet on it.

Here is the Fitch text:

I Can't Hear Poors
Team Zissou

Iceland is a small town, 318,000 people. It's hilarious that they even bother with macro statistics for the place.

I Can't Hear Poors
SteamshipTime Roland Xenophon SweetLeftFoot

The Iceland Financial Renaissance Miracle Continues


Iceland is winning so far in this gamble. They should count their lucky stars there were no sanctions/war as a result.

There were effective sanctions by Britain, which used anti terror legislation on them to "guarantee deposits" held by hideous grasping scum (such as my mate's awful South African girlfriend) who believed that fucking Internet savings accounts paying 5 per cent above any other rate (Icesave) weren't dodgy.