As time goes by we often wonder what would we have done differently if we had our chances again? The fate of life means that we do not get to undo our mistakes or change our choices. Nor do we know how things would have worked out if we had chosen a different path.
Yet, in our economically broken Western world, there is one nation that chose a different path. Iceland did not go for a too big to fail choice - after all who was going to help? Iceland went for the full blame the bankers option, including defaulting on all foreign debt and leaving the UK and Netherlands to pick up the bill for defaulting Icelandic banks.
Ireland went for bailing out banks it could not afford and believing a promise from the EU that it would help out. Now Ireland and Iceland both suffered huge jumps in unemployment, whilst the Irish currency held together, the Krona collapsed and with it living standards in Iceland...fora while.
But here we are 4 years later and Iceland has 2% growth, is being re-rated in the debt markets, has strong exports and a primary budget surplus. Ireland has only the good exports bit, unemployment remains high, even having the euro as its currency has not kept up the living standards as wages have fallen so far.
Indeed in Iceland the rich have suffered by far the most as their assets were wiped out, this has a long-term impact on ability to grow the domestic economy as the savings rate has fallen, but then Iceland's populace has voted in 2 referenda to make sure it happened this way
So here is the comparison, yes Ireland is 10x the size of Iceland and all comparisons will have to be seen in the light of this, but 4 years on and the economies are going in opposite directions. I can;t say that Ireland made the right choice looking at the results - sometimes a hard landing is worth the pain in the medium term.