Iceland on the brink

[goosebump]

Several eurosceptics on this Forum have repeatedly told us that we'd be better off out of the Eurozone and the EU and paddling our own canoe. SF reckon we should never have gone into the Eurozone. Look at Iceland, they say, sure aren't they doing fine?

The FT is reporting today that the cost of insuring €10m worth of Icelandic Government debt (Credit Default Swap) is €1.3m, or 1,300bps. A rate if 1,000bps is typically seen as a sign that a State is about to default on its debt. The Icelandic CDS was about 360bp a week ago.

Iceland's problems stem largely from the fact that the State has borrowed heavily in international markets, and now, with a currency that has lost most of its value in the last year, it can't come up with its repayments. The injection of €600m into Glitner in the last week hasn't helped either.

Of course, their problems wouldn't be quite as severe if they had been subject to the Growth and Stability Pact, were earning euros to pay euro and dollar loans and have recourse to the ECB as a lender of last resort.

Hands up who like to be Iceland right now?

[David Cochrane]

A person close to me pointed this out this morning saying "at least we're not Iceland".

[supamolli]

Looks like there won't be many Icelandic Christmas shoppers in Dublin this Christmas. Iceland went for it but once the sharks circled them there was no way to hold them off. 250,000 went into the water.

Lenihan could never have pulled his stunt if Ireland wasn't in the euro as Ireland's currency would have gone through the floor. Virtually all Ireland's debt is in its "national" currency.

[seabhcan]

Looks like there won't be many Icelandic Christmas shoppers in Dublin this Christmas. Iceland went for it but once the sharks circled them there was no way to hold them off. 250,000 went into the water.

Lenihan could never have pulled his stunt if Ireland wasn't in the euro as Ireland's currency would have gone through the floor. Virtually all Ireland's debt is in its "national" currency.

Probably part of the reason why Brown can't copy us and guarentee British banks. The UK banks have liabilities 4 timed UK GDP, verses 2 times in Ireland. And we have the euro to support us and the Brits are on their own.

Three cheers for the Euro.

[David Cochrane]

Just out of interest (and not wanting to be off-topic) but who here has ever thought of going to Iceland and was told to not go because it was so bloody expensive?

*puts hand up*

[kerrynorth]

Just out of interest (and not wanting to be off-topic) but who here has ever thought of going to Iceland and was told to not go because it was so bloody expensive?

*puts hand up*

Tenner a pint was enough to put me off. It may become very cheap in the coming years.

[Defeated Romanticist]

Could we bail them out? I always liked Iceland. Ah come on they are only the size of Cork. They can't be that expensive. Maybe we could buy them. Double the size of the country in on fell swoop.

[ibis]

Just out of interest (and not wanting to be off-topic) but who here has ever thought of going to Iceland and was told to not go because it was so bloody expensive?

*puts hand up*

*also with hand up*

Still want to go though - big fan of the Icelandic sagas.

[seabhcan]

Just out of interest (and not wanting to be off-topic) but who here has ever thought of going to Iceland and was told to not go because it was so bloody expensive?

*puts hand up*

Heard the same. My step-mother-in-law (I have a complex family) went there and came back with horror stories of €15 sandwidges.

I've been to Norway and that really is too bloody expensive. €12 for a glass of wine, €30 for a small unimpressive pizza. On top of that, the place isn't that impressive and Oslo is a dump. Its about as exciting as Castleisland in Co. Kerry and has about as much culture as Dundalk. The architecture is a cross between texas and a run down English village.

I imagine Iceland isn't much different.

[ibis]

Could we bail them out? I always liked Iceland. Ah come on they are only the size of Cork. They can't be that expensive. Maybe we could buy them. Double the size of the country in on fell swoop.

Plus think of the fisheries! By standard eurosceptic valuation, they're probably worth more than the entire US banking sector.