Even though Iceland suffered perhaps the worst financial crisis in history, one former Icelandic investment banker told Business Insider he thinks the country will be a “dream investment” in the future.The keyword is “future” though.
Iceland currently has currency restrictions, which hinder foreign investments.
However, once those restrictions are lifted, the banker explains, “Iceland will be back as a great investment opportunity.”
This time it will be for “all the right reasons,” he said.
The banker said what has helped Iceland is the government’s decision in 2008 to allow the large private banks, which owed more than six times the country’s GDP in debt, to default rather than bailing them out with taxpayer funds.
As a result, he said Iceland was able to move forward into a “real recovery” and avoid the situation of a “quasi-defaulted government and an endless row of bailouts” in order to postpone the inevitable.
He also believes other European countries involved in the debt crisis could learn from Iceland’s default model.
Now Iceland has a “fresh start” and a “clean slate” unlike other EU countries, the banker said.
This puts Iceland in a “very enviable” situation at the moment, he added.
The reason, he explains, is Iceland, a country with the population of about 320,000, is not part of the European Union and therefore has no liability or bailout exposure to the euro zone area which is currently embroiled in the on going debt crisis.
What’s more is Iceland still enjoys favourable trade with the European Union as a member of the European Economic Area. He also said the government finances are manageable.
As for future investments opportunities, here’s what he thinks is helping Iceland:
- The country’s vast natural resources
- The country has advanced infrastructure, abundant inexpensive green power (hydro- and geothermal)
- High level of education
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