Iceland’s recovery

Iceland in 2008 was the first country to be hit by the global financial crisis, yet we now hear little about the country. Why? Primarily because it has fared better than Ireland, Spain and other countries that followed. Tiny Iceland (population 320,000), defying conventional wisdom, adopted what turned out to be wise policies following the spectacular collapse of its bloated banking sector.

While everyone else rushed to give taxpayers money to the banks, Iceland let them fail. While the bankers at the heart of the crisis were protected and in some cases rewarded in the US and Europe, in Iceland they were jailed and while the rest of Europe embarked on a social spending slashing binge, Iceland expanded its social safety net.

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