A volcano in the south of Iceland has been spewing clouds of ash into the atmosphere. Prevailing winds are blowing the ash southwards over the UK, Scandinavian countries and over northern Europe. Over 16000 thousand flights have already been cancelled and airlines are losing $ 130 million a day. Thousands of passengers are stuck in airports all over the world. Curiously flights to Iceland from the US are operating because the northern part of Iceland, where the majority of people live, is clear. No one knows how long this will continue because if mother earth has gas she may continue to belch for a year. What happens to trade in Europe especially in the UK is anybody's guess. The UK is just recovering weakly from a severe recession but still has a huge fiscal deficit hanging over any economic recovery. If trade is upset for any length of time it could slide back into recession. Airlines such as British Airways could go bankrupt. Already airline shares are down sharply. In 2008 when the subprime crisis exploded Icelandic banks were heavily exposed and were unable to survive resulting in the government going bankrupt. At that time the British government under the leadership of Prime Minister Gordon Brown used anti terrorist laws to force Iceland to pay British citizens who had put money into Icelandic banks. What is the British government going to do now? Perhaps a little punishment for bullying a country in trouble instead of sympathising.