Wednesday, 29 January 2014

Unemployment Rate Falls to 4% in Iceland

Iceland let its banks fail in 2008 because they proved too big to save.

Now, the island is finding crisis-management decisions made half a decade ago have put it on a trajectory that’s turned 2 percent unemployment into a realistic goal.

While the euro area grapples with record joblessness, led by more than 25 percent in Greece and Spain, only about 4 percent of Iceland’s labor force is without work. Prime Minister Sigmundur D. Gunnlaugsson says even that’s too high.

“Politicians always have something to worry about,” the 38-year-old said in an interview last week. “We’d like to see unemployment going from where it’s now -- around 4 percent -- to under 2 percent, which may sound strange to most other western countries, but Icelanders aren’t accustomed to unemployment.”

The island’s sudden economic meltdown in October 2008 made international headlines as a debt-fueled banking boom ended in a matter of weeks when funding markets froze. Policy makers overseeing the $14 billion economy refused to back the banks, which subsequently defaulted on $85 billion. The government’s decision to protect state finances left it with the means to continue social support programs that shielded Icelanders from penury during the worst financial crisis in six decades.

Debt Relief

Of creditor claims against the banks, Gunnlaugsson says “this is not public debt and never will be.” He says his main goal while in office is “to rebuild the Icelandic welfare state.”

Though bank creditors, many of them hedge funds, are still trying to recoup their money, Iceland’s approach has won praise from the International Monetary Fund and from numerous economists, including Nobel Laureate Paul Krugman.

Successive Icelandic governments have forced banks to write off mortgage debts to help households. In February 2010, 16 months after Kaupthing Bank hf, Glitnir Bank hf and Landsbanki Islands hf failed, unemployment peaked at 9.3 percent. The rate was 4.2 percent in December, according to Statistics Iceland. In the euro area, unemployment held at a record 12.1 percent in November, Eurostat estimates.

“Even though the situation is a lot better here than in many other countries, having over 4 percent unemployment is something we don’t want,” said Gunnlaugsson, whose government was elected in April.

Welfare Spending

The government’s 2014 budget sets aside about 43 percent of its spending for the Welfare Ministry, a level that is largely unchanged since before the crisis. According to Stefan Olafsson, a sociology professor at the University of Iceland, the nation’s focus on welfare has been key in restoring growth.

The economy will expand 2.7 percent this year, according to the Organization for Economic Cooperation and Development. That’s better than the average for the OECD-area as a whole, which will grow 2.3 percent, the Paris-based group estimates.

Still, Iceland’s efforts to resurrect its economy have been far from smooth, Olafsson said. Inflation, which peaked at 19 percent in January 2009, has hurt Iceland more than most other countries because most mortgages are linked to the consumer price index. Though the set-up protects investors, households see their debt burdens grow as prices rise. Inflation was 4.2 percent in December.

Inflation Pain

“Although we’re spending more on welfare matters today than before, we have to keep in mind that purchasing power has gone down since 2008,” Olafsson said in an interview. “On top of increasing spending in the health care and education systems, the government should place emphasis on increasing people’s purchasing power. That’s the biggest single task.”

Most of Iceland’s inflation has come via the exchange rate, which has been protected by capital controls since plunging 80 percent offshore against the euro at the end of 2008. Gunnlaugsson says any efforts to scale back existing currency restrictions will only take place at a pace that safeguards krona stability.

“It is a problem that can be solved, and can be solved quite fast,” Gunnlaugsson said.

The krona has appreciated around 10 percent against the euro over the past 12 months. Still, today’s rate of about 157 per euro compares with an average of 88 in 2007, a year before the island’s financial collapse. It slid 0.04 percent to 157.02 as of 12:50 p.m. in Reykjavik.

To support households, Gunnlaugsson in November unveiled a plan to provide as much as 7 percent of gross domestic product in mortgage debt relief. The government intends to finance the plan, which the OECD has criticized as being too blunt, partly by raising taxes on banks.

Source: Bloomberg
Iceland24, January 2014

Friday, 24 January 2014

Car Rental in Iceland - Rent a Car in Iceland - Tips for renting a car in Iceland

Renting a car is really the best and only way to see the country so be sure to factor it into your budget. We went there thinking we would just take a bus to other areas -wrong. The only buses that exists outside the capital city of Reykjavik are tour buses. 

Car Rental Iceland - Car Rental in Iceland - Rent a Car in Iceland

So technically you can take a bus but you will pay for it because it will be part of an organized tours and it will add up fast. If you are traveling with another person a car is the cheapest way to see the country. Plus, driving in Iceland is very easy and there isn’t much traffic. We hoped you enjoyed our Iceland car rental tips!


April 7th to 14th 2014 (7 days)
Prices with TAX and Airport pick up / drop off

Option A - New Cars:

Dacia Duster 4X4  Diesel               559 USD / 414 EUR
Ford Escape 4X4                            606 USD / 449 EUR

Toyota Rav4 4X4                          1.078 USD / 798 EUR
Toyota Landcruiser 4X4                1.152 USD / 853 EUR

Suzuki Grand Vitara 4X4                550 USD / 412 EUR
Honda CRV 4X4                              560 USD / 405 EUR
*prices with all insurances included

Suzuki Grand Vitara 4X4                 897 USD / 664 EUR
Toyota Landcruiser 4X4                1.078 USD / 799 EUR

Suzuki Grand Vitara 4X4                946 USD / 701 EUR
Toyota Landcruiser 4X4                1.176 USD / 872 EUR

Dacia Duster 4X4                            530 USD / 398 EUR
Hyundai Tucson 4X4                       550 USD / 410 EUR

Car Rental Iceland - Car Rental in Iceland - Rent a Car in Iceland

Option B - Old Cars:

Nissan Qashqai 4X4                         678 USD / 521 EUR
Toyota Rav-4 4X4                            678 USD / 521 EUR

Suzuki Jimny 4X4                            509 USD / 400 EUR
Hyundai Tucson 4X4                        558 USD / 414 EUR

Toyota Rav-4 4X4                             646 USD / 479 EUR
Hyundai Santa Fe 4X4                      739 USD / 547 EUR

Nissan Qashqai 4X4                          758 USD / 562 EUR
Honda Cr-v 4X4                                977 USD / 724 EUR

Toyota Rav-4 4X4                             706 USD / 532 EUR
Nissan Qashqai 4X4                          707 USD / 531 EUR

Suzuki Grand Vitara 4X4                  971 USD / 719 EUR
Kia Sportage 4X4                            1.028 USD / 761 EUR

  • Go online: The best deals can be found online for Iceland car rentals.
  • Pick up at Keflavik International Airport: Because the airport is located about an hour from Reykjavik, you will have to spend $20 – $25 each way (15 - 20€) to get to and from the airport.
  • Get to know your vehicle: The longer you keep the rental car the cheaper it becomes.
  • Don’t buy it: You don’t need theft insurance for the vehicle. 
  • Petrol Blues: When considering renting a car be sure to factor in the cost of gas. 
Car Rental Iceland - Car Rental in Iceland - Rent a Car in Iceland

As is the case with most, if not all, countries, you must meet certain requirements under Iceland law before you can rent a car in the country. One such requirement involves the age of the driver. Generally, you must be at least 21 years of age to rent a car in Iceland. In fact, there may be additional age restrictions for certain vehicles. Similarly, you must have a valid driver's license from the European Union or your home country.

Car Rental Iceland - Car Rental in Iceland - Rent a Car in Iceland

Renting a car in Iceland may not be the cheapest way to explore the island (it’s tough to beat hitch hiking) but it doesn’t have to blow your budget. With public transportation being non-existent outside of the larger cities, like Reykjavik, renting a car gives you the freedom at a fraction of the cost when compared to the sightseeing tours sold at tourist information centers.

Car Rental Iceland - Car Rental in Iceland - Rent a Car in Iceland

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Peter, Iceland24
January 2014

Tuesday, 21 January 2014

Eiki Helgason does a Double Frontflip - Real Snow 2014

The older Helgasons brother, snowboarder Eiki Helgason, is trying to make it to the X-Games in Aspen. He tries his best (video below) and now you can vote to help him get through.

Before Eiki submitted a video to the X-Games voting website he obviously he had practice a lot. Talk about commitment! Check Out All of Eiki Helgasons Tries on The Double Frontflip to Fakie From His RealSnow Part


Below you can see a video of Eiki landing the trick! X-Games has their own system to decide who makes it to the games and the second round will finish today.

Eight of the world's best urban snowboarders have submitted 60-second video parts for a shot at X Games Aspen gold. Medals will be awarded by a panel of X Games judges, but the Fan Favorite will be decided by YOU! Remember: You can vote once a day for your favorites. Thanks for playing!

Eiki is now up against Dan Brisse. Dan's 60 second video can be seen below and there-under you can see Eiki's 60 second video.

CLICK HERE to visit the X-Games website where you can vote for Eiki.

Source: Icelandreview
Iceland24, January 2014

Monday, 13 January 2014

Akureyri Plane Crash - Dramatic Plane Accident in Iceland

Authorities from Iceland have released dramatic footage of an incident that occurred on August 5, 2013, when a small Beechcraft King Air plane crashed at the end of a dragstrip before a qualifying race was about to begin.

Three people were aboard the ambulance airplane when it smashed into the ground, including the captain and a paramedic who were both instantly killed, and the co-pilot, who (amazingly) survived with injuries.

It shows a Beechcraft Super King Air 200, registered TF-MYX, an Air Ambulance flight operated by Air Myflug crashing into a dragstrip near Akureyri Airport, in Iceland.

The plane had transported a patient to Reykjavik, Iceland and was returning to Akureyri when it was placed on hold to the west of the airport, where the dragstrip was being prepared for an air race.

As the footage shows, during a left hand turn, the Beechcraft lost height until it impacted into the ground. Quite surprisingly, of the three people on board, one (the co-pilot) survived the crash.

Peter, Iceland24
January 2014