Lessons from Iceland

On Thursday 28th June 2012, Fabian was part of an All Party Delegation to visit Iceland in the aftermath of the collapse of the Icelandic banks and the steps taken by the UK government to freeze that country's assets in the UK in order to protect UK depositors.This measure was deeply felt by the Icelandic government especially as anti-terrorism legislation in the UK was used in order to accomplish it.

Since this banking crisis in 2008 there have been many developments in Iceland. It is now clear that all the money owed to creditors in the UK by the former Icelandic banks will be repaid and the Iceland economy is growing. Fabian was particularly concerned to see what economic and political lessons could be learned from the Iceland experience.

Following the crisis the Iceland government was prepared to let the profligate banks go bankrupt. It seized as many of their assets as was possible and liquidated them for cash. The coalition government of the left decided that it needed to invest for growth, borrowing money when necessary. Fishing ( major element of the economy) has been scientifically managed and tourism has trebled in the last five years. Relationships with the UK are being steadily rebuilt.

While in Iceland, Fabian met with the recently elected President and the Home Secretary.

During his visit, Fabian was able to contrast the 'hair shirt' approach to crisis being imposed on the UK by the Tory Liberal / Democrat with those of the policies of Iceland, which are clearly working to restore their economy. He also noted the far lesser financial disparity between the well off and the less well off in Icelandic society and felt that this was supporting the greater common purpose he felt in that country with everyone pulling together to put things right.