By the end of 2013, Iceland’s banks will have forgiven almost €1.6 billion in consumer debt
Iceland’s expanded debt relief programme in Iceland is targeting too broad a demographic, the OECD has warned.
By the end of 2013, Iceland’s banks will have forgiven almost €250 billion kronur (€1.6 billion) in consumer debt, equal to more than 14 per cent of gross domestic product, according to estimates from the Icelandic Financial Services Association.
The unprecedented scope of the programme coincides with legal and political pressure on Iceland’s bank industry, whose €67 billion default in 2008 plunged the north Atlantic nation into its deepest recession in six decades and forced it to seek a €3.5 billion International Monetary Fund-led bailout.
Icelanders in April elected a new government promising more debt relief even as unemployment falls and the economy recovers.