Thursday, 16 June 2011

Greece, Ireland Can’t Copy Iceland Default Model, Sigfusson Says

http://www.bloomberg.com/news/2011-06-15/greece-ireland-can-t-default-like-iceland.html

Iceland survived by taking over the domestic units of its banks and leaving the foreign creditors to bear losses. An 80 percent slump in the krona against the euro offshore in 2008 sent the trade deficit into surplus within months, whilegovernment spending cuts helped rein in the budget. Iceland will post a shortfall of 1.4 percent of gross domestic product next year after 2011’s 2.7 percent deficit, the Organization for Economic Cooperation and Development said on May 25.

“It’s 100 percent certain that Greece will default,”Harvard University History Professor Niall Ferguson said in a Bloomberg Television interview with Erik Schatzker and Deirdre Bolton yesterday. “The only question is what euphemism will be dreamt up to cloak the fact that it’s a default.”

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