The Republic of Iceland is a small island located in the mid-Atlantic. Iceland is about the same size as the State of Virginia. The population of Iceland has hovered around 320,000 for the last decade. The island supports small industries of fishing, agriculture, and tourism. Iceland lacks natural resources and thus does not support any heavy industries. Still, the country offers its citizens free universal health care and excellent
educational opportunities through public schools and universities. The country
imports more than it exports. A prosperous and vibrant financial services industry fueled the country’s pre-September 2008 development. During the last decade world authorities
constantly ranked Iceland as one of the most desirous places to live. Iceland’s per capita income ranks among the world’s best. One has to wonder how a small island nation with limited resources produced an astonishingly high standard of living.
In September 2008 the global financial crisis arrived on the shores of Iceland like a tsunami. Since that day Icelandic society has not been the same, though it is on the rebound. The eruption of the Eyjafjallajokfull disrupted commercial air traffic and cost the airlines millions of dollars. In Iceland the volcano spread ash over the country’s most fertile agriculture lands. The contamination of these areas has setback the island’s economic recovery. Regardless of minor setbacks I believe that, ultimately, the citizens of Iceland must make lifestyle altering political and financial decisions to fix its economy. Iceland should shoulder the burden of its own mistakes. Icelanders should rebuild their nation’s economy while also repaying its debts.
Geir Hilmar Haarde served as Iceland’s Prime Minister from June 2006 to February 2009. During his tenure as PM, Mr. Haarde also served as head of his political party, the Independents. Mr. Haarde’s political party represented the centre-right of the political
spectrum. The Independents were opposed to membership in the European Union and
opposed economic interventional. I would categorize the Independents as
proponents of lazier faire. Mr. Haarde’s political party maintained its political base in Reykjavik, the nation’s capita and most populous region. Mr. Haarde’s party drew its support from the upper levels of Icelandic society. Prior to assuming the position of P.M. Mr. Haarde held other high level governmental positions. He received his undergraduate and post-graduate education from American universities. The general opinion is that Geir Haarde served as P.M. without any political difficulties until mid-September 2009. No one can argue that Mr. Haarde was not qualified to hold the position of PM. I believe that Icelandic society prospered under his leadership.
Many experts argue that U.S. government’s failure to intervene in the collapse of Lehman Brother’s Holdings was the catalyst for the global financial crisis. Speaking at a conference in New York City U.S. Treasury Secretary Geithner said that Europe would not let their financial institutions be at risk in the eyes of the public. In support of this belief he alluded to German Chancellor Merkel’s often stated assurance that Europe would not have another Lehman Brothers. With the collapsed of Lehman Brothers all short-term lending between banks dried up.