And the next Iceland is…
If there’s one thing you don’t want to be, it’s the next Iceland.
Since its currency, colossally indebted banking sector and economy collapsed in spectacular fashion in October, the country has become a byword for an economy that has truly hit the rocks.
Within weeks, banking problems and currency falls meant Hungary was being hyped as a “second Iceland”, at least until a joint International Monetary Fund and European Union rescue package restored some stability.
Next to win the unwanted comparison was Ukraine. Having lost at one stage half its value, the currency has somewhat stabilised — although most foreign investors are very hesitant to hold Ukrainian assets again. And like Iceland itself, Ukraine is now dependent on an IMF lifeline.
Now, it is Britain in the limelight. The New York Times as well as Britain’s Observer and Daily Telegraph newspapers have all made the comparison in recent days.
For people earning and saving in sterling, it is an uncomfortable place to be and nervousness is to be found in the strangest of places. During a recent visit to a podiatrist, a Reuters correspondent found the conversation punctuated with speculation about the possibility of an IMF bailout for Britain and angst over cutbacks in the National Health Service footcare budget.