Greenland is Very Green, and Iceland is Very... Red

From Becky Bonarek: After the U.S. financial collapse this week, we're beginning to see just how interconnected and truly global the world economies are becoming. Iceland, a country that most people don't even know where it is, is about ready to call Peter Francis Geraci. After both the Dow Jones and the NASDAQ lost an ungodly about of points this week, Iceland's government shut down their own stock market and seized control of all three major banks. With the Icelandic krona's value dropping by the second, the country could be forced to file national bankruptcy, the first European country to ever do so. (Venezuela has filed in the past.) They have approached Russia for a loan, but their best bet seems to be the International Monetary Fund (IMF), as the European Union will probably not want to absorb Iceland's debt by approving their bid to join. Another factor complicates matters even more: part of the reason for Iceland's fall from financial stability is the fact that foreign (i.e. other European countries) hold massive amounts of money in Icelandic banks. French citizens hold private stake Kaupthing*, in the last bank to be absorbed, and the UK government invested about a billion British pounds in those banks, which they're now demanding back. Relations between the UK and Iceland haven't been the same since the 1950's when the two countries clashed over fishing rights in the so-called cod wars. In order to look out for their own self-interest, European countries seem to be more than willing to cut their losses with Iceland and let them flounder while they run towards the nearest G8 meeting. With the world economy struggling to remain above water, what will happen to smaller countries less important to the system as a whole, but still affected by the crisis?

(*French-language source)