Now it looks like we're going to hear a lot more Icelandic accents in the months and years ahead on the streets of Dublin. The explanation, of course, is the spectacular implosion of their economy, as documented in an extraordinary essay over at VoxEU:
- Iceland's GDP in euro terms has shrunk by 65%
- Before the crisis, Iceland's banks had foreign liabilities equal to 10 times GDP
- A third of Icelanders are considering emigration (what the other two thirds will do is anybody's guess)
Whatever about the advantages and disadvantages of membership of the eurozone, there is no doubt that we would have 'done an Iceland' in recent weeks were it not for the euro. Of course, you could argue - as Davy did in their recent outlook for 2009 - that we wouldn't have gotten into our current debt-fuelled economic mess if we hadn't been in the euro in the first place.
Mind you, apartments in Reykjavik are going to be really cheap next year, hmm.