You are unlucky.
This is one of my favourite subjects  .
The truth behind the Icelandic Banks Fraud is dark and complex .
The way  to possible financial rejuvenation ( the present)  is not a road open to other countries of much greater size ( there are less than one half a million inhabitants in Iceland ) and has no relevance to the present global melt down ,  other than historically .
But before even coming to the present  , let me tell you how a bunch of international fraudsters set Iceland  alight and then watched it burn .

It starts with a very strange Icelandic Prime minister , David Oddsson ,  who may be one of the world's most ambitious criminals ever , but the case against him warranting this description has yet to be publicly demonstrated .
What we do know is that he  - and he alone --  turned Iceland into a massive test of extreme Free Market Economics from the late nineties . He privatised everything imaginable  and made money almost cheaper than fresh air . He even sold off Iceland's fishing grounds to ship owners who knew nothing about fishing . But , more fundamentally , he cut borrowing to almost zero and let everybody buy houses and cars and have almost unlimited credit at no painful short term cost .
He lay the ground for disaster -- a  massive property and housing bubble and enormous inflation . And he privatised the banks .
Many of Oddssons close friends now  owned Banks and Fishing grounds .
Landsbanki was Iceland's largest Bank  and it  served as the central bank of Iceland from 1927 until 1961. In these earlier  times , the bank  was primarily directed towards note issuance rather than monetary policy. It was later replaced in this capacity by the Central Bank of Iceland at the behest of the Althing --- Iceland's Parliament . While still publicly owned it went through a state-directed merger with Samvinnubanki (Cooperative Bank). Then --- and this is the key ----  Landsbanki Íslands was converted to a public limited company on January 1, 1998. The firm was subsequently privatized in stages between 1998 and 2003. AND ( AND ) !!!
Samson Holdings became the main shareholder. Samson Holdings was owned by Bjorgolfur Thor Bjorgolfsson and his father.
The Bjorgolfsson's were businessmen for generations and Thor's father had managed to become international and and in doing so , became  bankrupt in the US in a case of fraud and embezzlement .
So , they moved on  , and came to St Peterburg just when an ex KGB officer became Chairman of the St Petersburg Committee on External Economic Relations and soon went from zero wealth to billionaire status .A certain Comrade Vladimir Putin , no less , and someone who quickly learned how to work closely with the Tambov Gang .
The Icelandic businessmen,( Thor's close friend Magnus Porsteinsson also went to St Petersburg ) , together with Russian partners, founded the  bottling company Baltic Bottling Plant, which was sold to Pepsi. Next they founded a brewing company. "Торговый дом "РОСА" was registered in March 1995 and changed its name to Bravo OOO in February 1996 (address was also changed). It further changed its name to Bravo International OOO in August 1996 and Bravo International JSC in December 1997. Founders of Bravo were six companies registered in Limassol, Cyprus - Björgólfsson was president of all of them. Bravo Brewery became a success on the premium beer Botchkarov.
An article in The Guardian (2005) wondered where Björgólfsson's money came  from and noted that in the 1990s the Icelanders were not only ploughing money into the country but doing it in the city regarded as the Russian mafia capital--- St Petersburg . The bulk of all that huge  investment was being made in the drinks sector, seen by the mafia as the industry of choice. Competitors in the Saint Petersburg brewing market faced problems. For instance, Ilya Weismann, deputy director of competing beverage company Baltic, was assassinated on January 10, 2000. Later Baltic director general Aslanbek Chochiev was also assassinated. One competing Saint Petersburg brewery burned to the ground.
The company became the fastest growing brewery in Russia. Heineken bought the brewery for $400m in 2002.
Thor  returned to Iceland to gain interest in numerous ventures there.
In 2000, Saint Petersburg opened an honorary consulate in Iceland. Thor Bjorgolfsson was appointed Consul and Magnus Thorsteinsson ( his close friend)  was appointed Honorary Vice-Consul. The opening ceremony was held on March 10, 2000.
So it's no wonder that Icelandic business men were pumping Russian Mafia money into Russia and its no wonder that Russian Mafia money was laundered into Icelandic Banks and then invested all over Europe with a large proportion going into the British High Street . And later when you hear stories of Abramovich and Deripaska been seen frequently in Reykjavik , you don't need much imagination to see all of the links .
Well done Russia and -- as ever --- my dear friend Vladimir getting into the drama in a big way .We can safely say that the Russian Mafia with Icelandic help bankrupted the first country in modern history and set out the benchmarks for the global melt down which followed not far behind .

Coming to the present . It's one thing for a very small country  to ignore its debts . But a completely different sort of problem when it is a significantly sized economy . In today's terms , the very act of Italy renaging more than 25% of it's debts ( for example ) would bring down the whole of Europe and starting with Germany and France whose banks have crippling exposure to Italian debt .

The article you quote is well meaning and the author might even believe the nonsense that is advocated . But it is rubbish in terms of its Historical context and also in the greater world , where Iceland is just a drop in the ocean .