Iceland and the city of Reykjavik are emerging from their depression at break-neck speed. The country is betting its decision two years ago to force bondholders to pay for the banking system's collapse may help it rebound faster than Ireland

What's the difference between Iceland and Ireland? One letter, economic growth and about four years.

While we stumble in the darkness, the Icelanders are emerging from their depression at break-neck speed.

Unemployment is around a third of the Irish level, growth is forecast to be two and a half times our figure this year and the country does not have an enormous debt mountain because the Icelanders allowed their banks to fail and punished those who speculated rather than those who didn't.

Iceland offers the most fascinating rejoinder to those who say there was no alternative.

The interest groups who continue to rape this country will always argue that the two countries are different and they have a point; no two countries are ever the same but this does not mean that it is wrong to try and draw lessons from Iceland.

This week, the International Monetary Fund, which is hardly a left-wing organisation, made the point very clearly when the fund's mission chief to Iceland said the other bailout nations could learn a lot from Iceland's response and specifically mentioned the decision to burn bondholders, maintain a decent welfare system and introduce currency restrictions to stop money flowing out of the island.

The worst argument against the Icelandic response has always been that they had no choice. Even if it were true, it does nothing to invalidate Iceland's path.

Another point made by the bank bailout defenders is that Iceland is much smaller than we are but both countries are mere blips in the global financial system so this is hardly relevant either.

The two countries do differ in some fundamental ways, which perhaps helps to explain the different responses. The first big difference is leadership; Iceland, which has a 1,000-year tradition of real and often raw democracy, has leaders who are head and shoulders above our lot.

Even Geir Haarde, the disgraced former prime minister who stood trial for alleged incompetence but was acquitted, is head and shoulders above your average taoiseach.

The second difference is an independent currency. The Icelanders could do what they wanted, and they did. The krona was devalued by 80pc, which quickly began to bring in tourists and help the economy in all sorts of ways which are not available to our leaders.

While the academic research suggests devaluation rarely works and the British experience seems to support this belief, there is no doubt that an 80pc cut is going to act like a injection of adrenaline into an ailing economy.

Devaluation on this scale would be very difficult for any country with a land border.

It is all too easy to imagine how the dormant paramilitary organisations would flourish if we devalued and triggered inevitable and widescale smuggling between North and South. Iceland was lucky in this respect.

We are now half-way through a programme that is bearing some fruit, and on balance we should probably stick with it. But to pretend, as politicians and bankers here often do, that there was never an alternative is to short-change the country and willfully ignore Iceland's remarkable and robust recovery. Next time, we should take a leaf out of Iceland's book.

Irish bankers can learn a lot from our success at Olympics

BANK of England governor Mervyn King has taken a swipe at British bankers in a newspaper column, saying they should take a lesson about fair play from the Olympic Games, which have shown that money is not the only motivator for success.

"The financial sector has done us all a disservice in promoting the belief that massive financial compensation is necessary to motivate individuals," Mr King wrote as he praised the thousands who had volunteered as guides and helpers without pay.

Irish bankers tend to be even more crazy about sport than the sports-mad Mr King so it would be interesting to know what conclusions they have drawn from Ireland's Olympic success.

Specialists

It certainly won't have escaped the notice of the male-dominated world of Irish banking that having a few women on board is a help. They may also have noticed that success comes from specialists and this provides a model for Irish banking which lost the run of itself when it tried to be all things to all men.

But the chances are that most of our bankers will have missed one of the key lessons from Ireland's Olympic success -- that you don't need fancy buildings and thousands of people to shine. Modesty and resilience are much more important if you want to punch above your weight.

The weather takes a battering from companies

A GOOD rule of thumb is to steer clear of companies that blame the weather for poor performance.

This is something almost childish about moaning about the rain once you stop wearing short trousers and investors should be careful about putting their money into a business where management appear unable to smooth out the risks presented by inclement weather. C&C is one company that seems to blame poor sales on lack of sunshine rather too often.

CRH is another. DCC has been known to do the opposite and blame poor results on good weather - which depresses demand for central heating oil.

CRH was at it again this week when it attributed poor European sales (which makes up roughly half the company's total sales) to bad weather and the eurozone crisis (which is another lazy excuse).

The fact that Kingspan, which is in the same business and operates all over Europe, is going from strength to strength was quietly ignored.

While CRH's complaints about the weather (which was actually much milder than the weather in the first half of 2011) ring hollow, the company's concerns about the stability of Irish banks and the euro were fascinating.

CRH no longer keeps much money in Irish banks because of their poor ratings and no longer keeps cash in euro at the weekends in case some sort of crisis overwhelms the currency.

CRH has been gradually disengaging from Ireland over the past few years, closing down operations, shifting the main listing to London and now shifting money out of the country and out of the currency.

That's business, but it certainly isn't pretty or reassuring for the future.

Indo Business