ICELAND

CAUSES

• Greatly decreased financial restrictions
• Banks growing out of control
• Banks accumulated a lot of debt with a lot of foreign investment
• Small population = big jobs being handled by a small group
• Global financial markets also in crisis

CRISIS

• Banks carried too much debt and went under when the US banks did
• The currency (krona) decreased in value
• Tried to reach out to foreign branches, denied by foreign governments
• Major banks were heading towards bankruptcy
• Icelanders were upside down in their mortgages

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GLOBAL IMPACT

• Countries like Britain and Netherlands left having to pay deposits
• Iceland had to seek help from IMF
• Lead to debt crisis in Europe
• Considered joining EU

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THE ROAD TO RECOVERY

• Let the banks collapse
• Place controls on money
• Avoid paying foreign debt
• Devalue currency
• Go back to traditional sources of wealth

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THE BACKLASH

• Icelanders betrayed by banks
• Becoming isolationists
• Returning to their roots culturally and economically
• Lack needed foreign investment
• No longer seeking admittance to the EU

BEST SOLUTION

•  refocusing on their strengths
• Relying on fishing, tourism, and geothermal energy
• Recovering cultural identity and focusing on families
• This has to be mixed with international cooperation
• Isolationism will create new weaknesses