The Silent Revolution: Icelandic Anger, Debt Forgiveness and Activist Triumph | Wake Up World

The situation in Iceland is something those of us outside of the volcanic island nation hear about far too little, and when one examines the story of how Iceland triumphed over massive debts, it makes a lot of sense why this is the case.

Earlier this year, the Icelandic Financial Services Association published a report showing that since the end of 2008, Icelandic banks have forgiven the equivalent of 13 percent of the nation’s gross domestic product in loans.

This has directly lifted the crushing burden of debt form the shoulders of over one quarter of the Icelandic population, something which many people around the world – but especially in the United States, Greece, Spain, Italy and other nations struggling with massive debts – would likely appreciate greatly.

In 2008, Icelandic banks defaulted on a whopping $85 billion in loans, yet the nation has taken steps to recover and they are already proving to be effective.

“You could safely say that Iceland holds the world record in household debt relief,” Lars Christensen, the chief emerging markets economist at Danske Bank A/S in Copenhagen, explained.

“Iceland followed the textbook example of what is required in a crisis. Any economist would agree with that,” he added.

Then why wouldn’t other nations follow a similar model instead of pouring even more money into the black hole of debt, hoping that it will somehow fix itself?

That is a question which cannot be answered with any degree of certainty, but Iceland has proven that endless bailouts are not the only way we can turn countries around from the brink of collapse.

The Icelandic economy will outgrow the eurozone in 2012 and is set to outgrow the entire developed world on average, according to estimates from the Organization for Economic Cooperation and Development.

This growth is reflected in the fact that many polls are showing that the people of Iceland have no interest in joining the European Union, which continues to be wracked by a debt crisis the likes of which have never been seen.

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