I’ve been saying that for all the gloating people did last fall over Iceland’s collapse, that the country was actually in pretty good shape. Yves Smith observes, for example, that a small open economy like Iceland’s can just nationalize its banks and devalue its currency and put itself on the road to recovery. That’s not a fun thing to experience, but it’s a lot better than what Spain and Ireland are looking at—a sustained period of double-digit unemployment and round after round of nominal wage cuts.
Meanwhile, the other thing I’ve been saying is that currency issues aside, the fundamentals in Iceland are strong. It’s a small, quiet, peaceful, homogenous country full of healthy and well-educated people. When the global economy comes back, they’re as well-positioned as anyone else to take advantage of whatever opportunities present themselves.