Bailout

Iceland?s long night

By Felix Salmon

If you’re wondering how well a country can function in the absence of a working financial system, it might be worth taking a look at Iceland, where GDP shrank 5.7% in the third quarter, with no expectation of a bounceback until 2011. And for all that Reuters’s PR guru Jolie Hunt and others might love to go there on holiday, I don’t think the tourism market is going to be particularly big so long as there’s only 4.5 hours of sunlight per day. Meanwhile, Iceland’s enormous geothermal value seems to be accruing mainly to Alcoa rather than to the country’s citizens. The long night looks as though it’s going to last well past the March equinox: sunrise seems further away than ever.

Full post as published by Macroprudential on December 07, 2009 (boomark / email).