If you think the recession in the US has been dreadful, I recommend reading up on how Iceland has been coping.

This nation of just 320,000 people let its banks pull the country into a total financial disaster.

Their three national banks had debt equaling over three times the countries gross domestic product.

Their government collapsed, their currency lost a third of its value, they had to take out emergency loans with the IMF, and some of their European neighbors don't want to let them into the EU until they repay their debt. Sucks to be Iceland.

But despite all this, the country still has its biggest asset - itself. The nation is gorgeous, and they are heading back to their roots to take full advantage of this.

Tourism is up 20% this year, and they are on target to welcome 600,000 people, almost twice their own population. Part of the driving force behind this increase is a substantial drop in the cost of visiting Iceland. The country was always well known for its insanely high prices - it was quite normal to be charged $16 for a glass of wine, or $150 for a short excursion.

Many of these prices have dropped by at least 30%, which still puts them on the high side of what you'd want to pay, but makes it affordable enough to pull in more tourists. The lower exchange rate has also lowered prices of air travel to Iceland, flights from many European countries are available for under $200, and even round trip tickets from the US to Reykjavik are available for under $550 (all in) on Icelandair.

I highly recommend visiting the site of their tourism board to see how much the nation has to offer. Your tourism krónur may not be able to pay off their debt, but you'll certainly help them in the right direction.

Filed under: Europe, Iceland