Iceland on the brink

People in Europe are jittery about the financial situation, but at least we are not going through the economic meltdown that Iceland is experiencing. Some of the banks there have been nationalised to prevent their collapse, while the value of the Icelandic krona is apparently in free fall. There are reports of people panic-buying imported foodstuffs, as the foreign exchange is not there to keep buying them in. It all looks a bit grim, and there is a real prospect of Icelanders having to go back to a diet based on putrefying sharkmeat. The government there is in crisis talks with the country's trade unions, hoping that they can save the Icelandic economy by agreeing wage restraint and (perhaps more crucially) by repatriating the monies they have invested in foreign pension funds. The unions are demanding as a quid pro quo that the country apply immediately to join the European Union, something the country's elite have always opposed.

This to some extent reminds me of the unfortunate fate of Newfoundland. Though now a province of Canada, it was once an independent dominion. Then in 1934, its government went bankrupt, and the country lost its independence, reverting to direct rule from London, before it was merged into Canada in 1949.