October 28, 2008
The news that the interest rate in Iceland has jumped to 18% (from 16%) is going to have a major impact on such a small economy.
How the need to make such a move would have been handled should Iceland have been inside the eurozone, who can say. It is however, the kind of fear that many eurosceptics have about the euro. Can one size really fit all?
Of course, now is hardly ‘normal’ in terms of financial and economic action. But the real test of an economy and currency is how it handles the rough waters. Clearly, the Icelandic economy is on the verge of sinking without trace – even after Russian assistance.
What on earth can be done to stem this relentless wave of selling?financialguy