Europe should follow Iceland’s model of winning public support for austerity measures and returning to economic growth after a crisis, according to Iceland Prime Minister Johanna Sigurdardottir. Speaking in an interview with Reuters, the union activist-turned-politician said the euro zone should learn lessons, such as how to mix unorthodox policies with measured austerity, from the tiny island nation.
“We believe, and so does the IMF, that our case can be a role model for some of the countries in crisis now,” she told Reuters. “I’ve met with several leaders over the past years, some from Greece, and many prime ministers have been surprised by our economic turnaround and asked how we did it.”
The IMF was forced to bail out Iceland after its banking sector collapsed in 2008. After the country’s economy shrunk by more than 10 percent between 2009 and 2010, however, it has now bounced back and is growing at a faster rate than any other in Europe.
After gaining power with the Social Democrat’s shortly after the crash, Sigurdardottir cut public spending and introduced austerity measures that hurt, but were accepted by, the majority of the country’s 320,000 citizens. In comparison, Greece, now struggling through its fifth recession year, has seen a violent backlash from its people and increasing support for a radical left-wing opposition party.
“Becoming more disciplined and lowering state expenses, while at the same time keeping the welfare system strong, is what needs to be done to have wide support from the public for such measures,” said Sigurdardottir. She added that capital controls will now start to be eased as Iceland gets back on its feet.
Reader Comment: Following the example of Iceland would require a peoples that have personal and social responsibility, a history of sound government rather than corruption, and lack an excess of personal entitlement. A people willing to pay taxes for those things they believe needful and banks run on a sound actuarial basis rather than bonuses for false performance.
The president of the European Commission, José Manuel Barroso, laid bare his frustration with the constant lecturing from outsiders at he recent G20. “Frankly, we are not coming here to receive lessons in terms of democracy and in terms of how to run an economy because the European Union has a model that we may be very proud of,” Mr. Barroso said.
Non-EU countries should prepare for the coming shock of an EU that will no longer be able to control its’ debt.
Read more: http://www.icenews.is/index.php/2012/06/20/iceland-pm-europe-should-copy-us/#ixzz1yQxkxJk3