Crippled by huge amounts of foreign debt, Iceland all but declared bankruptcy last October. As the recession deepens, at least five other countries might be staring down a similar fate:
- Great Britain’s high level of consumer debt and its reliance on its financial sector have put it in an especially precarious position, especially considering its unemployment rate could rise to over eight per cent as its economy contracts by 2.8 per cent in 2009.
- After years of stunning growth, Latvia’s economy has become the weakest among EU member states and the country’s faith in capitalism has been shaken as a result; the government’s popularity currently sits at an abysmal 10 per cent.
- Greece’s sky-high debt-to-GDP ratio of more than 90 percent have made it a risky place to invest and the country is still recovering from the widespread rioting of last December.
- Ukraine’s export-driven economy has been decimated by the plummeting global demand for steel, and its political volatility—especially its hostile relationship with neighbouring Russia—is well-documented.
- Nicaragua is suffering from the side effects of the recession in the U.S., mostly because the country is heavily dependent on money sent in from abroad. Its president, Daniel Ortega, has made matters worse by attracting the scorn of foreign lenders with his authoritarian ways.