10xGDP? I can't help but think what you mean there is the balance sheets of the Icelandic banks. Irish debt is currently a bit north of 100% of GDP, not 1000%!
Ireland's banks had balance sheets 3.5 times GDP, which meant that Ireland could in theory, if it was lucky, if the gambles paid off, etc, stand over its banks, whereas Iceland couldn't under any circumstances do so and had to face that fact immediately. [/QUOTE]
The main problem we faced was that the banks debts was in foreign currency. We could have handled a lot if the banks had borrowed in icelandic kronas, unfortunately they didn't. So, as you said, we had to cut the rope.
Ireland's debt is/was mostly in its own currency but alas not one you can print your way out of with unlike the US and Japan.