The Core

Why We Are Here => Economics & Investing => Topic started by: littleman on December 19, 2012, 05:38:47 AM

Title: Iceland vs. Ireland
Post by: littleman on December 19, 2012, 05:38:47 AM
http://www.independent.ie/business/irish/dan-white-the-economic-return-of-iceland-has-proved-that-the-joke-was-on-us-3327164.html

The perspective that being responsible with debt doesn't pay.
Quote
...In the financial markets, as elsewhere in life, eaten bread is soon forgotten. Would-be investors in Icelandic bonds focus most of their attention, not on what happened in the past, but on what is likely to happen in the future.

What these investors see is that, by burning the bank bondholders rather than taking these debts on to the national balance sheet, the Icelandic sovereign is in a far stronger position to repay any future debts....
Title: Re: Iceland vs. Ireland
Post by: BoL on December 19, 2012, 12:10:01 PM
It does seem a little perverse, though that saying "too big to fail" comes to mind. Ireland is small relatively speaking but still has 10x more people than iceland. By far the biggest  debtor for Ireland is the UK, at around 104 billion EUR. http://www.bbc.co.uk/news/business-15748696

If that had a serious effect on the UK, the 6th largest economy in the world... it could have got 'automatically' very messy for everyone else.

That said, if Irish/Greek people have to bear the pain while Iceland enjoys a renaissance of fortunes... the average person on the street will be fairly hacked off about that.
Title: Re: Iceland vs. Ireland
Post by: BoL on December 19, 2012, 12:43:28 PM
Ireland & Greece being in the Euro no doubt further complicates it...  Greece has already walked down most of that road for all to see.