Skip to comments.Iceland's Viking Victory
Posted on 02/17/2012 9:31:55 PM PST by bruinbirdman
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 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:
Fitch Ratings has upgraded Iceland's Long-term foreign currency Issuer Default Rating (IDR) to 'BBB-' from 'BB+' and affirmed its Long-term local currency IDR at 'BBB+'. Its Short-term foreign currency IDR has also been upgraded to 'F3' from 'B' and its Country Ceiling to 'BBB-' from 'BB+'. The Outlooks on Long-term ratings are Stable.
"The restoration of Iceland's
(Excerpt) Read more at blogs.telegraph.co.uk ...
One thing going for them is they are not members of the EU
Iceland may want to say “No Thanks” to that application to the EU if they want to continue on their present course.
Did I hear someone say "Viking victory?"
I can't remember the last time I heard that phrase.
Hope it was over the Packers.
I go to Iceland quite often. There is a segment of the population that think belonging to the EU would be a good thing in that they think the costs of goods and services coming from Europe would be cheaper. Those with more insight realize that in spite of the fact that Iceland does not have her own military they would none the less have to contribute to Nato as well as face the risk of helping bail out the Greeses of Europe..I hope the wiser minds prevail.
The different thing they did was not bailing out banks.
I see his smirk turning into a slight smile on this one. He does seem to think that Iceland has pulled something off.
what’s going for them is that they are not members of the Eurozone. the Eurozone is not synonymous with the EU. Being part of the EU has benefits (and disadvantages for Iceland). Being part of the Eurozone has much more disadvantages for a peripheral state like Iceland
I mentioned that in a very early post.
I mentioned that in very early post. Thanks for mentioning it again.
yes and your statement was wrong — joining the EU has advantages for Iceland that outweigh the disadvantages. Joining the Eurozone, on the other hand has more disadvantages
Thank you for the correction.
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