School and Education in Iceland

There are 10 years of free and compulsory compulsory education for anyone between the ages of 6 and 16. 75% of children attend preschool, which parents have to pay for. The Ministry of Education is responsible for all education from kindergarten to adult education. In 1995, the school was decentralized and is now the responsibility of the local authorities. The central curriculum of 1999 emphasizes the teaching of foreign languages. English is compulsory from 5th grade and Danish from 7th grade. In the 10th school year, Icelandic, Danish, English, mathematics, social sciences, natural sciences and social orientation and physical education are compulsory subjects.

Iceland Country Flag

Iceland flag source: Countryaah.com

The secondary school offers a varied offer to everyone and covers the age group 16-20 years. The 4-year high school (high school) prepares for college and university studies; 2- to 4-year high schools provide both theoretical and vocational education. There are also special vocational and vocational schools. Almost all students continue in high school.

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Iceland has 5 universities. The oldest is the University of Reykjavík, Háskóli Islands, which was founded in 1911. Many students study abroad, either in Scandinavia or the United States.

2008 Economic collapse

The global economic crisis of 2008 hit Iceland hard. The previous 5 years had been characterized by high economic growth rates and extensive Icelandic investment in other parts of Europe, but the entire financial circus was based on foreign loans and therefore collapsed with the global crisis. It was a school example that when “the market is left to itself” as neoliberalists – e.g. combined with CEPOS wishes, it produces deep crises. The Icelandic banking system had been completely deregulated in 2001.

In mid-2008, Iceland’s foreign debt was DKK 50 billion. € equivalent to 6 times the annual GDP. The banks accounted for 80% of this amount. One of them – Landsbanki – had branches in the UK, the Netherlands and Guernsey under the name Icesave where private individuals were lured into deposits at high interest rates. In the UK alone, Icesave had deposits for 6.5 billion. £ in September 2008.

When the crisis broke out in September, around ½ million Private savers in these countries deposited in Icesave, which they began to withdraw. It emptied both Iceland’s and Landsbanki’s foreign exchange reserves in a matter of weeks. Landsbanki simply went bankrupt and within a few weeks was followed by the two other Icelandic major banks Glitnir and Kaupthing. All three banks were nationalized and taken over by the Icelandic state.

As a result of the collapse of major banks and the economy, on 6 October the European financial institutions canceled all foreign currency transfers to Iceland. The state then had to assume responsibility for foreign exchange trading for the following 2 months. Immense restrictions were immediately imposed on who and how much currency could be bought at all. The collapse had spread to the private borrowers at this time. In previous years, many private individuals had been encouraged to take out home and consumer loans in foreign currency. The collapse of the currency trade caused the exchange rate to fall from 70 ISK/€ at the beginning of the year to over 250 ISK/€. Thus, interest rates and repayments on private loans became more than 3 times more expensive and caused many private individuals to go bankrupt, or threw them into deep financial problems.

The United Kingdom now applied its terrorist legislation to Iceland. On October 8, the UK Parliament frozen all of Icesave’s and Landsbanki’s assets in the UK in an effort to secure the approximately 300,000 UK customers of the bank. A similar step was taken in Norway 1 week later, and in the other European countries where the Icelandic banks had branches, severe restrictions were imposed.

The Icelandic stock exchange also collapsed. From a peak in 2007 when the stock market index reached over 9000, it fell to 200 in December 2008 – equivalent to the stock market losing 97.8% of its value. The bank collapse accounted for the majority of this collapse.

Assistance to Iceland began slowly to come in October – for fear that the Icelandic collapse would lead to the whole of Iceland going bankrupt and that the bankruptcy would drag down a large number of European banks. In early October, Iceland tried – in vain – to get financial support from Russia. On October 14, Norway and Denmark each provided DKK 200 million. € as part of the swap agreements. On October 24 gave the IMF a tentative commitment to a loan of DKK 1.58 billion US $. However, Icelanders were appalled by the stringent requirements that came with the loan. A policy the IMF for the last 30 years has applied to the Third World, but which the developed countries had not been exposed to. However, the loan commitment was blocked by the UK and the Netherlands who would first have guarantees that their ½ million. private customers could get their receivables in Icesave. On November 19, the IMF could announce a deal that gave Iceland $ 4.6 billion. US $. The $ 2.1 billion directly from the IMF and an additional $ 2.6 billion from Norway, Sweden, Finland and Denmark. Poland subsequently offered DKK 200 million. US $ (the largest group of guest workers in Iceland were Poles) and the Faroe Islands offered 50 million. US $ (equivalent to 3% of Faroese GDP). Germany, The UK and the Netherlands subsequently put together a loan package worth $ 5 billion. € to solve the problem with the half million Icesave savers.