Monday, January 12, 2009

Save Iceland.

I am terribly clueless when it comes to economics, despite taking a module or two of it in the past. I think that it is such a great pity that a country which was ranked number one on the United Nations Human Development Index for 2007/2008 and the 2nd longest living nation (with a life expectancy of 81.8) has come to this sorry state.

Iceland is especially hard hit by the ongoing 2008 economic crisis, because the debts of its banks are around six times its annual gross domestic product of €14 billion ($19 billion). In October 2008, the Icelandic parliament passed emergency legislation to minimize the impact of the financial crisis. The Financial Supervisoral Authority of Iceland has used permission, granted by the emergency legislation, to take over the three largest commercial banks of Iceland, Glitnir, Landsbanki and Kaupthing. Icelandic officials, including central bank governor Davíð Oddsson, have stated that domestic operations of the banks will be separated from foreign operations and that the state does not intend to take over any of the banks' foreign debts or assets. The Icelandic economic crisis has been a matter of great concern in international media.

On 28 October 2008, the Icelandic government raised interest rates to 18%, a move which was forced in part by the terms of acquiring a loan from the IMF. After the rate hike, trading on the Icelandic króna finally resumed on the open market, with valuation at around 250 ISK per Euro, up significantly from a 1:150 ratio the week before and a 1:70 ratio during most of 2008. Iceland is still appealing to Nordic countries for an additional €4 billion in aid to avert the continuing crisis.

Maybe a little tourism would help them revive their economy. They do have really beautiful countryside landscapes; serene and a tat moody. Great for running away from all the hustle and bustle of the city life.

Such a peaceful scene.

Lovely Blue Lagoon. Looks chilly though.

Hallgrímskirkja, a Lutheran parish church in Reykjavík, Iceland.

Out in the country.

The Northern Lights as seen from Iceland.

Oldest turf houses in Iceland.

Another view of the countryside.

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