British MEP: Iceland Right NOT To Bail Out Banks

Daniel Hannan is an author, journalist and Member of the European Parliament. He has represented South East England for the Conservative Party since 1999 and was a guest on Radio National’s Counterpoint recently. A Europhile, Daniel believes the European Union is making its member nations poorer, less democratic and less free. He writes:

“Leftie bloggers enjoy teasing me about my support for Iceland..

It’s becoming increasingly apparent, though, that Iceland’s refusal to bail out its banks – the approach which a handful of free-marketeers vainly urged on the British and American governments – has left that pure and beautiful country poised for a textbook recovery. Even The Economist accepts that Iceland is better placed than Ireland. Now Aditya Chakraborrty, a Guardian leader-writer, argues in Comment is Free that refusing to bail out the banks was economically sensible (let’s take it as read that it was morally right).

Icelanders are unfreighted by the debts which most EU countries incurred when assumed the liabilities run up by private banks. That’s not their only advantage. Being outside the euro, they have been able to tailor their monetary policy to their own needs, and are exporting their way back to growth; and, being in EFTA (European Free Trade Association), they enjoy access to the European market without the regulatory costs of full EU membership.

Indeed, provided Icelanders eschew EU membership – as I urged when I was in Reykjavik recently – they will continue to enjoy one of the highest living standards in the world. Eurocrats, perhaps alarmed by the example which a prosperous and independent Iceland would set to their own populations, have announced that they will spend €28 million there over the next three years in an attempt to encourage the “Yes” campaign. They misjudge the temper of the stubborn, self-reliant, bloody-minded locals. If Icelanders can be bribed into abandoning their democracy, they are not the people I know.”

I wonder how will history judge the GFC?