Iceland

This was the tiny country that told the banks where to go! Perhaps there is a lesson to be learned?

Booming Iceland repays IMF early

Iceland, whose economy has recovered rapidly following the 2008 collapse of its banking sector, on Friday repaid $US483.7 million in loans to the International Monetary Fund, the lender said.

the Age,

24 June, 2012

The early repayment, which follows another one of more than $US900 million in March, is a symbolic step for the country of just 320,000 people as it works its way out of a financial meltdown that ravaged the economy.

Iceland's main commercial banks collapsed in the space of a week as the global financial crisis struck in late 2008, imploding under the weight of huge debts built up during an aggressive overseas expansion.

But the country's rebound has been equally surprising. Iceland's economy expanded in the first quarter at its fastest pace since its near-meltdown, powered by a surge in exports, tourism and domestic consumption.

Gross domestic product grew 2.4 per cent quarter-on-quarter in the first three months of the year to put annual economic growth at 4.5 per cent in the period, the highest since the first quarter of 2008.

The Icelandic government was forced to seek aid from the IMF and its fellow Nordic countries to stabilise its economy, and it imposed rigid capital controls to avert a complete collapse of its currency.

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Iceland Plans to Join European Bloc Despite Economic Turmoil

Despite a sovereign debt crisis that threatens to tear the European Union apart, Iceland is speeding ahead on its bid to join the bloc and even delivered a pep talk Friday to those struggling to hold it together.