Finally people seem to realise that EU membership is something the nation needs to confront sooner rather than later.
While the special interest parties have spread fear and loathing towards the EU, more and more citizens are waking up to the fact that Iceland’s standing in the world is becoming more and more perilious. The issue of a legitimate currency is vital and the nation needs to regain trust if it is supposed to be a realistic option to live in for future generations.
Frettabladid reports that The Indefence group, comprised of Icelanders with various interests in the UK has said that the British government is prepared to assist Iceland onto a fast-track into EU membership. This was put forth in a meeting in London this spring where the Indefence group was protesting the terrorist law imposed by the UK last autumn. Andrew Dalgliesh in the British Foreign Ministry told the group that the UK would try to make sure Iceland could be a member within a year. European Minister, Caroline Flint has sent the group a letter reitarating that this support was real.
The winds change quickly this spring and real movement on the issue might actually happen in the summer.
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Roy
2 years ago
In order to enter the EMU the following must be met:
(1) the national legislation governing the country’s financial system had to be compatible with the treaty provisions controlling the European System of Central Banks; (2) the country had to achieve a rate of inflation within 1.5% of the rates in the three participating countries with the lowest rates; (3) the country had to reduce its government deficits to below 3% of its gross national product; (4) the country had to keep its currency exchange rates with the limits defined by the ERM for at least two years; and (5) the country had to keep its interest rates within 2% of the rates in the three participating countries with the lowest rates.
Dadi
2 years ago
You are right Roy.
But Iceland will never meet that criteria with the ISK. So those will have to be bent. I think most officials in the EU and Iceland realize that.
Physchim62
2 years ago
There’s nothing surprising in the UK supporting Icelandic membership of the EU: the two countries share many common positions on how the European project should be moving forward, so the UK would be gaining an ally for many of its arguments while appearing to be pro-European at the same time.
For membership to occur, there are two prerequisites. First, the political debate within Iceland has to move beyond the level of “ZOMG, but the EU will take all our fish!” EU membership cannot occur without the support of the Icelandic population, and that support has to be won through argument, not demagogy.
Secondly, the glacier bond problem has to be solved: there is simply no way that Iceland will be allowed in while retaining currency controls. However, this is a requirement for membership, not for starting negotiations.
The euro is a separate issue from EU membership: Iceland has to join the EU before it can adopt the euro, whatever the Independence Party tries to pretend it its last-ditch attempt to get its grubby hands back on the levers of power.
Physchim62
2 years ago
Roy’s comments are only valid for stage three of EMU, ie adopting the euro as the national currency. Only stage one of EMU (abolition of exchange controls) is a legal prerequisite for EU membership. Seven current EU members (including the UK and Sweden) are not members of the ERM, which is the second stage of EMU.
Roy
2 years ago
Regarding stage 3; is not the end game to get rid of the krona and adopt the Euro? I think we are pissing up a rope if we expect the powers that be to look the other way regarding the 5 items I listed in my previous post.
Physchim62
2 years ago
Roy: if Iceland were to become an EU member, it would commit itself to attaining the five points you mention above at some point in the not too distant future. In any case, they are worthy macroeconomic goals regardless of EU membership – just ask the Swiss, who fulfill all five except the bureaucratic detail of helping other countries to maintain their exchange rate through the ERM.
On the other hand, the sine qua non for EU membership is stage one of EMU, that is the absence of exchange controls. Iceland doesn’t meet the criterion at the moment, but it would be good to try to meet it for purely domestic reasons, let alone the question of EU membership.
A faithful application for EU membership, supported by the population after a proper discussion, would no doubt help the Icelandic economy: such a thing cannot be dreamt up out of thin air, but we can at least be honest as to what the requirements are.