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Iceland Facing Bankruptcy


Source : http://www.independent.co.uk

Two years ago, Iceland was top of the UN living index. Now it is in the frontline of the global economic crisis after the failure of its banks, reports Sophie Morris in Reykjavik.

Just a few short years ago, Iceland had much to be proud of. The good times were rolling so fast that one expected the country's almost round-the-clock summer daylight to last all year. Business was booming, society overfed, and the capital, Reykjavik, was in vogue as a travel destination for rich revellers, gastronomes and culture lovers.

Iceland is a country of dramatic natural beauty: lunar landscapes, spouting geysers, sheer glaciers and craggy volcanic rock formations; an impressive but inhospitable isle floating in mid-Atlantic isolation. When, in 2007, it topped the UN's Human Development Index for its high standard of living, literacy and life expectancy, the tiny community of 310,000 felt they had proved their educated, hard-working and resilient character on an international scale.

Iceland has survived famine, volcanic eruptions and smallpox before. Now it must confront the fact that it has been blighted by a man-made disaster.

Iceland: The facts

*Population: 313,376

*Currency: Icelandic Krona (ISK)

*Unemployment in October 2008 1.9%; January 2009: 7%. Expected to rise to 8.6% in 2010.

*Inflation: 13.1%

*Interest rates 18%

*GDP per capita in 2007: $42,000

*GDP per capita now: $39,400

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