mercoledì 25 febbraio 2009

Reflecting on Iceland...

I live in a small rural village in Central Italy and here the great international facts seem far events as they are happening far away in another planet. Nonetheless, thanks also to Internet, in these recent days, my interest is more and more focused on Iceland.

Since recently, Iceland was considered here only as a travel destination, for tourism or for work reasons: it appeared as a paradise where life standards were high and unemployment didn't exist.

What is remaining of this Paradise? Iceland seems today a country of the third world, with an astonishing monetary devaluation, high unemployment levels, a generalized fall in the quality of life.

What is going on? In brief Iceland has become one of the first great victims of the last financial collapse caused also by the strong links between the Iceland banking system and Leheman Brothers. The Iceland banking system, despite a not timely government's intervention, completely imploded for the enormous debt accumulated during the uncontrolled period of economic expansion: the entire economic system is consequently falling down together with the political system.

All this has provoked protests in the streets by the people (the pans and pots riot) forcing the government to resign: today Iceland has a new Prime Minister, Mrs Johanna Siguroardottir, who has the difficult task to deal with the severe crisis and with the negative heavy impacts of the shock therapy suggested by IMF.

Why should we worry about Iceland? There are many lessons emerging from this story.
First of all, it is necessary to think about the fact that a fallout in a prosperous European country is not a theoretical hypotesis, but a real possibility. This possibility is not an event exclusive of South America, but it may happen also here.

We should reflect also about the fragility of a prosperity generated by financial speculations, lack of rules, banks' hyper-capitalism. Ultra-capitalism, political incompetence, too much power delegated to managers and bankers may kill a country and destroy the life of entire communities.

For this reason Iceland appears as a macroscopic example about the severity of the current economic crisis: within this scenario there's no space for improvisation, political incompetence, speculations, private interests and political irresponsibility because the price of it may be extremely high. Economists and politicians have thus a lot to think about also here in Italy: and even common people should reflect on it.

This is the reason why I continue in observing what is going on in Iceland.

I'm not actually interested in economic analises or in political discussions: thanks to internet, I prefer to give space to people of Iceland, to whom I want to express my solidarity, many of them are now living a huge catastrophe.

Just as examples, I suggest these blogs and posts:
Iceland Says
Iceland Eyes
Iceland Banking Crisis
The news from Iceland

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