Iceland has often been cited as a model of how to solve the economic crisis, being presented as an example of recovery without austerity. As we have pointed out before, this is far from the truth, as any person from Iceland will tell you. On Sunday, the left government was unceremoniously booted out. This is the price they pay for the austerity of the last four years.

As Europe teeters once more, staring financial collapse and slump in the face, we provide an analysis of what happened in Iceland, the first country to go under as a result of the global crisis of capitalism.

We have received this report from Iceland about a protest outside a conference hosted by the Icelandic government and the IMF. The letter makes the point that the IMF package for Iceland has been unsuccesful and that ordinary Icelanders are struggling to make ends meet. It shows that the political and economic crisis in Iceland is continuing.

In yet another turn of the IceSave saga, the people of Iceland are to vote on Saturday in yet another referendum on whether to accept collective responsibility for the debts of the failed Icelandic bank IceSave. We have received a following letter from a group of Icelanders which we republish here with our comments.

After the president's recent rejection of the IceSave deal between Iceland and the UK and the Netherlands, the country and its financial markets have been plunged into uncertainty. The draconian terms demanded by the deal has caused outrage in Iceland, forcing a referendum on the issue. The only decent thing for the government to do now would be to reject the deal and any attempt to force the people of Iceland to repay the debts of its financial speculators.