Iceland ‘shows the way’ on bailout recovery

Iceland holds some key lessons for nations trying to survive bailouts after the island’s approach to its rescue led to a “surprisingly” strong recovery, the IMF believes.

Iceland’s commitment to its programme, a decision to push losses on to bondholders instead of taxpayers, and the safeguarding of a welfare system that shielded the unemployed from poverty helped propel the nation from collapse toward recovery, according to the organisation.

“Iceland has made significant achievements since the crisis,” Daria Zakharova, IMF mission chief to the island, said. “We have a very positive outlook on growth, especially for this year and next year because it appears to us that the growth is broad-based.”