The case of Iceland – the illusion of an amicable default

By Luca Lombardi 
In Defence of Marxism
02 November 2011

As Europe teeters once more, staring financial collapse and slump in the face, we provide an analysis of what happened in Iceland, the first country to go under as a result of the global crisis of capitalism.

Protests in Reykjavik in January 2009Protests in Reykjavik in January 2009. Photo: finnur malmquistIn 2008, Iceland suffered the biggest financial collapse any nation has ever had, if we consider the size of its economy. Even more striking is the fact that Iceland is no emerging country, mesmerized by the sirens of Western finance, but a modern, affluent nation with a Scandinavian welfare state.

Before the crisis erupted, Iceland, a remote Atlantic island, with the inhabitants of a medium sized European city, was a country famous for its natural wonders visited by many people from all over the world as well as for its music. The collapse of the country’s three major banks (Kaupthing, Landsbanki and Glitnir) led to financial disaster and street protests that toppled the government.

Read more HERE.