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by ptaipale
4090 days ago
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Iceland is not a very useful counterexample for "a country must not break promises" - or more precisely, "is it not wise for a country to break trust in its policies" - because I can't see what promises Iceland would have broken. Why the Iceland case is different - and Iceland has not lost serious trust in eyes of lenders - is that Iceland did not run a serious public deficit and it did not fill such a deficit by borrowing. Still, the economic crisis brought a shock to Icelandic economy in form of huge devaluation. If Portugal would have gone from EUR to its own currency, how much would it have devalued? ISK halved its value practically overnight:
http://www.tradingeconomics.com/embed/?s=usdisk&d1=20050101&... |
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