We all know that the U.S. is having some money troubles. We've gotten used to hearing 'seven hundred billion dollars' repeated and echoed on TV and the radio and in print. But we are not alone in economic distress. Europe's been feeling a little panicked, too.
By my reckoning, the first country that did a bail-out plan was Ireland. They jumped right on it:
(from 10/1/08)
Ireland said Tuesday it would guarantee payments on as much as €400 billion ($563 billion) in bank debt...The figure, which the government said guaranteed nearly its entire banking system, is twice the country's gross domestic product.
Ireland acted a lot faster than the US in doing a bailout. And in terms of the size of the each respective country, Ireland's move is substantially larger than America's 700 Billions. Ireland is not nearly as large as the US. I think that speaks well of Ireland's concern for its people and for its reputation. People will not say that the Irish renege on promises. Although, I would feel concern if I were an Irish taxpayer. But Ireland will probably come out all right.
That's not true of every country. Take Iceland. Right now, the big explosion of Iceland's banking has left nothing but rubble. Last year, the excitement was high and the money was pouring in. At that time, The Times of London described the scene in Reykjavik, the capital of Iceland. The "billionaires boys club" rode the wave of a deregulated banking system. The Icelandic Krona was quite expensive, and everyone was living large:
Flush with cash raised domestically and from international markets and headed by fresh-faced entrepreneurial chief executives, firms such as Bakkavor Group, FL Group and Baugur have used Reykjavik as an unlikely base for aggressive overseas expansion...The success of these firms has attracted overseas investment far out of kilter with Iceland’s own small economy... It is one reason for the run on the currency sparked by a mini-financial crisis in Iceland last year. Standard & Poor’s, the credit rating agency, gave warning last week that it may cut the country’s sovereign rating, causing alarm bells to ring ...To tame inflation it has lifted interest rates to a record 13.75 per cent.
Article comments
1 - Ruvy
Anyone who uses "bupkis" in her article deserves a comment.
Apparently the Icelanders did a job on the Europeans and took their money. How that makes them different from the executives living off of golden parachutes made from firing thousands of people from their jobs has me puzzled.
Your article is far more appropos than all the garbage about Obomba and McClutz that litters the site....
2 - Murphy
Thanks Ruvy! I'm blushing.
I've had my eye on a trip to Iceland for some years now. I'd love to see the country for myself, but you know, that Krona was killing me.
Maybe in a year or so, they'll be back to reasonably priced and I can fly over to saga-land and have some fish and chips with the Icelanders.
3 - Ruvy
If you get to go, watch your wallet. A Viking is nothing more than a Norsky pirate and apparently the ability to fleece foreigners does not require raiding parties and a dragon ship.
4 - Dan(Miller)
Bank accounts in Iceland are frozen? That's absurd. If true, Global Warming will take care of the problem. Soon the crisis will abate, and all will be
coolhot.Besides, even a modest diversion from the heat of the current political debacle in the U.S. is welcome.
Dan(Miller)
5 - Dr Dreadful
Watch who you're calling a Norsky pirate, Ruvy. I have Viking blood and so does Clavos, to name but two who post here.
And, if some of your folks came out of Russia, chances are you do too.
6 - Ruvy
My wife has Norsky blood in her. But I'm not going after all Norskies - certainly not you or Clavos - though getting the lot of you to smile can be work (22 years of living in Minnesota will teach anyone that).
Nevertheless, the Icelanders managed a very effective raid on Europe's assets without a dragon ship or raiding parties. They should be congratulated on their savvy. It was piracy in the best tradition - yet done without a single grapple hook or corsair.