Why is a bank, an International Bank, allowed to determine the fate of an entire country? According to yesterdays newspaper article, the IMF is FORCING Iceland to raise it's key interest rate by 6 full percentage points. Somehow I get the feeling that this will not be very good for their economy.
I did a little research on Iceland and found out that they are not a member of the European Union. It seems that until just recently, Iceland's economy was doing just fine. They did not have any real reason or incentive to join the European Union. Now all of a sudden the entire country is on the verge of bankruptcy. I think high interest rates had something to do with their economic problems.
I'm not quite sure how raising interest rates even higher is going to help their economy. In fact, my guess is that it will make it worse. But the good news is, due to their economic havoc, they may reconsider their decision to join the European Union. Hmmmm!
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