2008 Financial Crisis: Iceland's Then & Now

The stock market collapsed by 90%, the unemployment rate tripled, increased from 3% to 9% in a few months. All of these incidents made the Icelandic people relatively poor and brought massive dissatisfaction and intense demonstration in Reykjavik, the capital. Since 1949, the police had to use tear gas for the first time for the demonstrators. Former Icelandic Prime Minister Grizzard is one of the main causes of the crisis and he sought a new election after a dramatic demonstration in Reykjavik.

But now it is clear that Iceland is experiencing a typical bubble economy that became one of the first victims of the 2008 global financial crisis. This proves that Iceland is also the cornerstone of the neoliberal economy before the crisis. The biggest victim of the crash. Immediately after the New Year 's Day in 2008, foreign investors began to doubt whether high interest rates in Icesave accounts promised by banks will be repayable. Can Icelandic banks larger than the whole Icelandic economy can be cashed in loans? Because of this uncertainty, the Krona began to decline - and it was confident of the ability of the bank or the Icelandic government to maintain a huge oversized economy. When investors call, economies with only GDP of $ 21 billion can not afford to pay 50 billion dollars of external debt. "Icelandic banks are too big to fail," Matt O'Brien wrote in the Washington Post.

The financial crisis in Iceland is a major economic and political event in Iceland and at the end of 2008 all three domestic private private banks failed due to difficulties in refinancing short-term debt and difficulties in deposits in the Netherlands did. And the UK. The collapse of systematic banking in Iceland is the largest in any country in economic history compared with its economic scale. The crisis brought about a serious economic depression and major political upheavals from 2008 to 2010