Iceland turns 90 amid economic ruin, currency freeze
Wojciech Moskwa, Reuters
December 1, 2008
REYKJAVIK – Iceland marked the 90th anniversary of its autonomy on Monday with its economy in ruins, its confidence fading fast and its future uncertain.
The country faces pressing problems concerning its immediate economic situation and more strategic, long-term questions over whether to stay independent or try to join the European Union.
Ravaged by the global financial crisis, Iceland’s three top banks collapsed in October, an emphatic end to an era of cheap foreign funding which had driven a decade-long economic boom.
“Our situation has never been worse in 90 years… and most people still don’t realise how serious it is,” said Vilhjalmur Bjarnason, a professor of finance at the University of Iceland.
“We can’t really see the end of what is happening right now,” said researcher Andrea Gudbjorg from opinion polling company Capacent. “There are no signs of a turnaround.”
Iceland’s 320,000 residents, among the most affluent in the world, are staring at a protracted recession with the economy seen shrinking 10 percent next year. Construction sites around Reykjavik have been deserted and unemployment is set to soar.
Prime Minister Geir Haarde is under growing pressure to resign, blamed by many for failing to spot the warning signs of the economic collapse and major lapses in regulations.
“The government has slept through this entire crisis,” said Jonina Sigurjous, a nurse. “How could it get so bad? We never had to worry about things like the crown (currency) or jobs.”
Consumer confidence has plummeted and the once high-flying Icelandic crown has effectively ceased trading.
To prevent an outflow of capital which would further weaken the crown, Icelanders can only buy limited amounts of foreign currency at their banks after presenting a valid ticket to go abroad.
A country in crisis:
– Iceland’s 320,000 people are staring at a protracted period of hardship with the economy expected to contract 10 percent next year.
– Bailouts from the IMF and elsewhere total $10 billion.
– Until its banking sector was deregulated in the late 1990s, the island’s economy was based mainly on fishing, and marine products.
– Iceland’s financial stature swelled as its banks expanded rapidly overseas.
– Important exports now include aluminum, ferro-silicon alloys, equipment and electronic machinery for fishing and fish processing, and pharmaceuticals.
– Icelandic businessmen had become well known for risk-taking and a fast, decisive approach to investments. The country had spread its business interests far and wide during the era of cheap finance.
Source | See Also: TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland inflation soars to 17.1% | Canada in recession: OECD | Maybe we should look at Zimbabwe before trying to print our way out of a money crisis | Britain to introduce massive stimulus package | Obama appoints architects of economic collapse, financial globalism to economic team | Jim Flaherty Urging Greater Federal, International Control over Canadian economy | Citigroup seeks ‘emergency cash’ | Deficits ‘essential,’ Harper says | Harper vows Canada will remain open to international trade | 5 injured during protest in Iceland over economic meltdown | ‘Hard decisions’ needed during economic crisis: throne speech | Paulson, Bernanke defend change of plan: $700-billion now to be given directly to banks | After G20 meeting, Ottawa ready to spend to spark economy | Congress Accuses Federal Reserve Bagman Of Bailout “Bait and Switch” During Angry Hearing | Flaherty eyes sale of Canadian government assets | Analysts Predict Hyper-Inflation To Push Gold To $2000, Oil to $300 | Terence Corcoran: Rescuers pulling market under | U.S. government won’t use bailout fund to buy troubled assets | Ottawa to pour another $50B into mortgage markets | Bank of Canada adds $8B to credit markets | Merrill CEO: Economic Environment Recalls 1929 | Fed Hides Destination Of $2 Trillion In Bailout Money | PM, premiers agree to speed up infrastructure investment | Flaherty lauds Keynesian global ‘economic stimulus’ strategies | Who are the Architects of Economic Collapse? | The Bush gang’s parting gift: a final, frantic looting of public wealth | IMF may need to “print money”, act as “world’s central bank” as crisis spreads | Morgan Chase Exec Brags Bailout Is for Takeovers, Restructuring, Not Lending | Draft letter calls on IMF to play critical role in financial crisis | Ottawa to guarantee interbank lending | More cash needed to save economy: Bernanke | Wall Street banks in $70bn staff payout | German parliament backs bail-out | Regulator says brokers failed on ABCP, sets new guidelines | US Bailout Cost Heads Towards $5 Trillion | Market Euphoria Dissipates | Loonie leaps, then reverses course | $25B credit backstop for banks ‘not a bailout’: Harper | Brown wants ‘global’ bank support | US considers following British example of taking stakes in banks | New World Order: Global co-operation, nationalisation and state intervention – all in one day | TSX closes up 226 points in wild day after rate cuts | Federal Reserve Moves to Monetize Commercial Paper Debts | Stocks recoup some losses after markets hit by panic selling | Star column blames ‘Capitalism’ for market woes, offers false choice: Authoritarianism or Socialism | Bank of Canada greases financial system with $12B in new cash | Stock markets drop despite bailout | Why Paulson’s Plan is a Fraud | Representatives Were Threatened With Martial Law In America Over Bailout Bill | Congress Rejects (First) Bail-Out Plan | Congressman Ron Paul: Bailout Will Destroy Dollar, World Economy | Paul Martin calls for ‘global solution’ | Markets sink as woes spread | UK banking shares plunge as crisis deepens | Congressman Ron Paul Schools Fed Chairman Bernanke on the Bailout Plan | Bailout is “petty cash”, Inflation is the Federal Reserve’s real crime | Private Federal Reserve Makes Power Grab as Bush, McCain Urge Congress to Approve Plan | Canadian Supreme Court refuses to hear appeal in ABCP case | Last major investment banks in U.S. change status | U.S., British market regulators ban short-selling | Next Federal Reserve bank bailout round could cost taxpayers 1$ Trillion Dollars | Bank of Canada piles on in global inflationary swindle | Central banks continue inflating global economy | Central Banks Move to Transfer Wealth from Taxpayers to Banks | Crisis on Wall St. as firms collapse | Goldman-Sachs Alumni Hold Reins of Financial System | Frontrunners emerge in scramble to save another major bank | Lehman Brothers on Verge of Collapse, Wall Street Fears | US Treasury nationalizes Freddie Mae, Fannie Mac | Cities Debate Giving Away Public Infrastructure to Bankers | Court Grants Big Banks Immunity from Lawsuits over Derivatives Losses | Bush Calls for New Highway Tolls, More Private Funding of Roads | US mortgage firm bailout includes rider clause to expand police state: all credit card transactions now to be reported to IRS | Global ‘liberalization’ illusion under threat. Economist calls for world economic regime, Keynesian saviour. Irony? | Federal Reserve cites global stakes in Fannie and Freddie rescue | Financial ’super cop’ role for Fed | What Really Killed Bear Stearns? | Soros points out regulated markets fail to operate on market fundamentals, calls for more regulation | Competition study calls for lowered barriers to foreign ownership, bank mergers | Massive overhaul urged on foreign investment in airlines, media, and banks | Bilderberg Seeks Bank Centralization Agenda | Secretive Bilderberg Group Reverses Policy, Releases Press Release and Attendance List | Banks face “new world order,” consolidation: report
December 26th, 2008 at 7:58 am
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
January 8th, 2009 at 1:45 pm
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
January 15th, 2009 at 4:16 pm
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
January 20th, 2009 at 8:55 am
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
January 28th, 2009 at 1:59 pm
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
January 28th, 2009 at 2:52 pm
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
January 28th, 2009 at 5:48 pm
[...] storm central bank in protest | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | Maybe we should look at Zimbabwe before trying to print our way out of a money crisis | Obama [...]
January 29th, 2009 at 12:10 pm
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
January 30th, 2009 at 12:37 pm
[...] storm central bank in protest | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | Maybe we should look at Zimbabwe before trying to print our way out of a money crisis | Obama [...]
February 4th, 2009 at 9:15 pm
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
February 5th, 2009 at 12:00 am
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
February 5th, 2009 at 12:16 pm
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
February 16th, 2009 at 12:34 pm
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
February 22nd, 2009 at 10:24 am
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
March 1st, 2009 at 2:01 am
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
March 17th, 2009 at 8:59 am
[...] storm central bank in protest | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | Maybe we should look at Zimbabwe before trying to print our way out of a money crisis | Obama [...]
March 22nd, 2009 at 8:06 pm
[...] [...]
March 24th, 2009 at 1:28 am
[...] [...]
March 26th, 2009 at 12:19 pm
[...] [...]
March 26th, 2009 at 12:48 pm
[...] [...]
March 26th, 2009 at 3:00 pm
[...] storm central bank in protest | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | Maybe we should look at Zimbabwe before trying to print our way out of a money crisis | Obama [...]
April 21st, 2009 at 11:28 am
[...] [...]
May 11th, 2009 at 8:04 am
[...] [...]
June 16th, 2009 at 7:37 am
[...] [...]
March 22nd, 2010 at 9:36 am
[...] open with call for ‘co-operation’ | UK closer to joining euro, EU commission president says | Iceland turns 90 amid economic ruin, currency freeze | TSX drops 600 points, N.Y. also falls | Britain buys control of Royal Bank of Scotland | Iceland [...]
June 15th, 2010 at 7:21 am
[...] [...]