Sarah Ensor unpicks the myth that Iceland has taken an alternative route to austerity
Iceland's Tories are back in power just five years after their spectacular disgrace. Though their vote only increased by 3 percent, the conservative Independence Party has returned to government in coalition with the liberal Progressive Party.
This is a dramatic turn of events. In 2008, as the shockwaves of the global financial crisis hit Iceland's economy, the then Tory prime minster Geir Haarde had to announce, "There is a real danger that the Icelandic economy could be sucked with the banks into the whirlpool and the result could be national bankruptcy."