As reported by the Telegraph,
Iceland, whose economy has recovered rapidly following the 2008 collapse of its banking sector, on Friday repaid $483.7 million in loans to the International Monetary Fund.
The early repayment, which follows another one of more than $900 million in March, is a symbolic step for the country ....
Iceland's main commercial banks collapsed in the space of a week as the global financial crisis struck in late 2008, imploding under the weight of huge debts built up during an aggressive overseas expansion.The 'collapse' was the result of a policy choice not to adopt the Japanese model and protect bank book capital levels through bailouts and regulator forbearance (under which the banks keep zombie borrowers alive through 'extend and pretend' practices).
But the country's rebound has been equally surprising. Iceland's economy expanded in the first quarter at its fastest pace since its near-meltdown, powered by a surge in exports, tourism and domestic consumption.Actually, there is no surprise that the real economy in Iceland has continued to grow. Unlike the real economy in the EU, UK or US, Iceland's real economy does not have to carry the burden of supporting excess debt.
Instead of money being drained out of Iceland's real economy to service the debt, the money is reinvested in growing the real economy.
Iceland is not the only example that the Swedish model with transparency works. The US showed it works to break the back of the Great Depression and Sweden used it to handle its financial crisis.
It would also work if it was adopted in the EU. Your humble blogger frequently wonders why the policymakers of the EU are spending trillions of euros under the failed Japanese model when they could spend tens of billions of euros under the Swedish model and end the financial crisis.