In this interview with Fox News, Iceland President Olafur Ragnar Grimsson says that because banks are private businesses, leaders in Iceland decided to let them fail. The result of Iceland’s Grimsson’s “comprehensive plan” is to date, 3% economic growth and 5 % unemployment. Grimsson has also served as the Minister of Finance for the Northern European country.
He says that, “By going against established, orthodox views prevailing in the US and Europe, we actually managed to create a recovery which is quite remarkable.”
According to the interview, Grimsson didn’t “implement austerity” but instead increased social spending and then added many new taxes.
“When you are taking a nation through a profound, financial crisis.. this created enormous hardships for ordinary families in Iceland, who lost, many of them their houses, some of them their entire savings. So, if you’re going to bring a nation through a profound crisis like this, back on the road to recovery, you have to enable them to see justice done. You have to empower them.. to make them realize that everybody is paying the costs.”
He continues, saying that currency controls were implemented and, “We devalued our currency.”