Iceland's Foreign Minister, Ossur Skarphedinsson, explains how his country managed to pull itself away from the financial abyss in 2008, without forcing the people to bail out the banks or imposing austerity measures.
Foreign Minister Ossur Skarphedinsson of Iceland explains to RT's Marina Portnaya how his country survived the financial crisis in 2008 - and offers up a few pointers as to how other countries in the Eurozone can do the same.
Iceland recovered remarkably well following the 2008 global financial crisis.
Skarphedinsson explains that they were the first country down in the crisis, but that they were also the first country up.
He explains that what kept them apart from the other countries in Europe was that Iceland made an economic plan with the International Monetary Fund (IMF) and they stuck to the plan.
"We stayed the course, we took all the difficult decisions and we didn't budge," he said.
He explains that Iceland went a different way than other European countries. Instead of just adopting austerity measures, Iceland raised taxes quite a lot, meaning that the state had a much greater income which allowed it to pay the debts.
Iceland also put money into infrastructure projects to stimulate the economy. "We went a mixed path, really. That is what was different between us and the rest of Europe," he said.
Portnaya says "Iceland let four of its big banks fall in 2008 but supported key sectors of its economy. Europe is doing the exact opposite right now, it is forging out aid to the ailing banking system while imposing austerity measures on the people."
"Why isn't the European Union learning from Iceland's experience?" she asks.
Skarphedinsson explains that it is probably a type of arrogance with the big countries never looking at the small fish in the pond.
"What we did, which was completely opposite to the Eurozone countries.. and even the USA, is that we didn't socialize the losses, we didn't let the tax payers shoulder the burden. What we did was to let the bond holders that took risks go away with their losses. We sheltered the average person, that is to say the state guaranteed the deposits of the individuals."
Portnaya says, "So you put the people first before the corporations, before the banks."
Discussions continue, including the fact that Iceland wishes to join the European Union, despite the current problems and Skarphedinsson explains his reasoning.