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: How One of the World's Smallest Counties Became the Meltdown's Biggest Casualty." It was German money, Jónsson says, that flowed the most freely following the liberalization of Icelandic banks in the 1990s.But Iceland, with a population of just 320,000, has also staged what appears to be the fastest recovery on record. The Economist "At the beginning of the Icelandic Miracle was Germany, "says Ásgeir Jónsson, 43, in his office as he bends over a few diagrams.Since 2011, the gross domestic product has been on the rise once again, most recently at 2 percent. They all snap downward in the fall of 2008 before showing a gradual climb starting in 2010. Jónsson clearly enjoys the surprise on his guest's face.What's more, salaries are rising, the national debt is sinking and the government has paid off part of the billions in loans it received in 2008 from the International Monetary Fund ahead of schedule. Jónsson was head economist for Kaupthing Bank, one of the three Icelandic banks that leveraged far too much debt and crashed overnight in 2008 following years of unprecedented growth.
Billions evaporated instantly while hundreds of thousands of depositors and foreign investors feared they would lose their money.
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