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CarHire4Lower
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lowest rates from Iceland
Iceland
Searching for car hire is never much fun. That is why
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Settled by Norwegian and Celtic (Scottish and Irish) immigrants
during the late 9th and 10th centuries A.D., Iceland boasts
the world's oldest functioning legislative assembly, the
Althing, established in 930. Independent for over 300
years, Iceland was subsequently ruled by Norway and Denmark.
Fallout from the Askja volcano of 1875 devastated the
Icelandic economy and caused widespread famine. Over the
next quarter century, 20% of the island's population emigrated,
mostly to Canada and the US. Limited home rule from Denmark
was granted in 1874 and complete independence attained
in 1944. Literacy, longevity, and social cohesion are
first-rate by world standards.
Iceland's
Scandinavian-type social-market economy combines a capitalist
structure and free-market principles with an extensive
welfare system, including generous housing subsidies.
Prior to the 2008 crisis, Iceland had achieved high growth,
low unemployment, and a remarkably even distribution of
income. Government economic priorities have included stabilizing
the krona, reducing the current account deficit, containing
inflation, restructuring the financial sector, and diversifying
the economy. The economy depends heavily on the fishing
industry, which provides 40% of export earnings and employs
5% of the work force. It remains sensitive to declining
fish stocks as well as to fluctuations in world prices
for its main exports: fish and fish products, aluminum,
and ferrosilicon. Iceland's economy has been diversifying
into manufacturing and service industries in the last
decade, with new developments in software production,
biotechnology, and tourism. Abundant geothermal power
has attracted substantial foreign investment in the aluminum
and hydropower sectors and boosted economic growth, although
the financial crisis has put several investment projects
on hold. Much of Iceland's economic growth in recent years
came as the result of a boom in domestic demand following
the rapid expansion of the country's financial sector.
Domestic banks expanded aggressively in foreign markets,
and consumers and businesses borrowed heavily in foreign-currency
loans, following the privatization of the sector in the
early 2000s. Worsening global financial conditions throughout
2008 resulted in a sharp depreciation of the krona vis-a-vis
other major currencies. The foreign exposure of Icelandic
banks, whose loans and other assets totaled more than
10 times the country's GDP, became unsustainable. Iceland's
three largest banks collapsed in late 2008. The country
negotiated over $10 billion in loans from the IMF and
other countries to stabilize its currency and financial
sector, and to guarantee foreign deposits in Icelandic
banks. A protracted recession is expected in 2009 and
2010 with GDP likely to contract and unemployment likely
to surpass 10%. The collapse of the financial system has
led to a major shift in opinion in favor of joining the
EU and adopting the euro. Previous opposition to this
move stemmed from Icelanders' concern about losing control
of their fishing resources. Iceland's coalition government
collapsed in January 2009 following protests over growing
joblessness and losses to personal savings.
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