Iceland Is Full
The country of 330,000 had 1.26 million tourists last year
Iceland, population 330,000, had 1.26 million tourists last year as a combined result of it being home to various Game of Thrones filming locations and also being so beautiful as to have drawn Game of Thrones to film there in the first place. Now, essentially, the country is worried that it is full: overcrowding is a problem, along with a massive strain on infrastructure not built to accommodate so many people, as well the fact that tourists keep doing rude tourist things like trampling all over/ruining the natural environment. So for now, next time you consider a trip to Iceland, just take that beautiful pristine landscape you're imaging and fill with a whole bunch of other people just like you who can't find a bathroom.And from the Wall Street Journal:
• Is Tourism Spoiling Iceland? [City Lab]
Iceland Puts Freeze on Foreign Investors
New law offers foreign holders of about $2.3 billion worth of krona-denominated government bonds a tough choice
Iceland has spent eight years locking down its financial markets to keep foreign investors in. Now some are complaining the island nation is trying to shove them out.
A law passed May 22 by Iceland’s parliament offers the foreign holders of about $2.3 billion worth of krona-denominated government bonds a Hobson’s choice: Sell out in June at a below-market exchange rate, or have the money they receive when their bonds mature impounded indefinitely in low-interest bank accounts.
Investors, including Boston-based mutual-fund companies Eaton Vance Corp. and Loomis Sayles & Co., a unit of Natixis SA, don’t want to go. They say they will reject the government’s offer.
“We would like to stay invested,” said Patrick Campbell, a global bond analyst at Eaton Vance.
The dispute is the result of a wholesale turnaround in Iceland’s relationship with foreign investors.
The country became synonymous with financial alchemy after its banks ballooned by borrowing in bond markets and attracting foreign depositors with high interest rates. That system imploded in 2008 when depositors made a run on the banks just as their bonds fell due, causing the krona to sharply devalue against the euro.
Yet a growing number of fund managers are now buying Icelandic government bonds, including those that were marooned on the island when it applied capital controls. The country is now one of the few offering a combination of high interest rates and strong economic growth prospects.
Eaton Vance and another holder of the legacy debt, also called “offshore” debt, hedge fund Autonomy Capital LP, have been courting the government for months to allow them to keep their cash on the island, even offering to swap their holdings into long-term bonds that they would pledge to hold on to.
But the country isn’t interested. Instead, officials behind the law say they aim to keep the $16.7 billion economy of the island with a population of 327,386 from being swamped anew by the ebb and flow of offshore funds.
“We don’t need the money,” said Mar Gudmundsson, governor of Iceland’s central bank. “These are remnants from the last boom and bust, and we are not going to repeat that mistake.”...MORE