From Iceland — President: Iceland Recovered Because "We Let The Banks Fail"

President: Iceland Recovered Because “We Let The Banks Fail”

Published January 28, 2011

President Ólafur Ragnar Grímsson, speaking to CNBC, shared his thoughts about how and why Iceland’s economy has been improving over the past two and a half years.
Asked to comment on the sovereign debt crisis in Europe while attending the World Economic Forum in Switzerland, the president said, “Iceland has been able to recover significantly, first of all, because we let the private banks fail. And because we had, and still have, our independent currency, we could devalue it. So all the sectors – the clean energy sector, the fishing sector, the tourism sector, the IT sector – they have in fact in the last two years been doing better, paradoxically, than before. The IMF programme will probably be over later this year. So Iceland is, in fact, on a road of recovery in a much more effective way than most people expected.”
The president also believes that the current crisis in Europe is a vindication of sorts for Iceland. “There were a lot of people who got political mileage out of criticising Iceland [at the time of the 2008 banking crisis] in a rather arrogant way. … But now for example Britain and the Netherlands have finally backed off from a deal they were absolutely pressuring us to accept last year,” referring to Icesave.
The president went on to claim that Iceland’s economic measures have “put Iceland in a better position than many other European countries, possibly even better than Britain.”
The interview in its entirety can be seen here.

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