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It’s official – Iceland is emerging from recession, with growth up in the last quarter, and inflation and interest rates down. What lessons can we learn from our North Atlantic neighbours, and can Ireland follow Iceland out of the financial doldrums?

The British chancellor of the exchequer, George Osborne, published legislation on Thursday granting a €3.87 billion bilateral loan facility to Ireland. Two years after Iceland’s €7.5 billion IMF bailout, the North Atlantic island has returned to growth for the first time, recording 1.2 per cent growth in the last quarter. Inflation is at its lowest level since 2004, at 2.6 per cent, and the official interest rate has dropped from 18 per cent at the height of the crisis to a more manageable 4.5 per cent.