📓 Political Changes in Iceland After 2008 Financial Crisis

Iceland’s political response to the 2008 financial crisis included a number of reforms, including: Capital controls The government imposed strict capital controls in November 2008 to stabilize the Icelandic króna. These controls were a key part of the government’s plan to restore monetary stability.

Banking system restructuring The government restructured, bailed out, and nationalized banks. The government also split up banks that were too big to save, separating their domestic and foreign operations.

Fiscal stimulus The government implemented fiscal stimulus programs to help boost economic recovery.

IMF bailout The government secured a US$5.1 billion bailout from the IMF and the Nordic countries to finance the budget deficit and restore the banking system.

Social welfare system protection The government took steps to protect vulnerable groups and reduce inequality.

Constitutional assembly The government convened a constitutional assembly to discuss changes to the Constitution.

Parliamentary election A parliamentary election was held in April 2009, which resulted in a new government coalition.

The Icelandic government’s response to the crisis was considered unorthodox, but it was successful in helping the country recover

Published by Nathan R