Iceland Put EU Membership Talks On Ice

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Denis Foynes – Iceland’s newly elected Prime Minister, Sigmundur Davíð Gunnlaugsson has ordered an abrupt halt to EU (European Union) membership talks with Brussels.

Gunnlaugsson has instead promised a referendum to give Icelanders their say and the opinions polls in the country suggest that the majority of citizens would reject EU membership.

Iceland applied to join the European Union in July 2009, a year after it experienced one of Europe’s worst economic disasters. However, Iceland has made an amazing recovery in recent years due mainly to it not being part of the Eurozone. The country was able to preserve the price of its exports by devaluing its currency.

Prime Minister Gunnlaugsson stated this week: “The government intends to halt negotiations between Iceland and the European Union. We will not hold further negotiations with the European Union without prior referendum.”

For years Iceland had been flirting with EU membership, all the while Gunnlaugsson’s party, the Progressive party opposed the idea. One of the main reasons is fears surrounding EU control over Icelandic fishing stocks. Fish and fish products account for more than 70% of those exports.

Gunnlaugsson has previously stated that foreign creditors of Iceland’s collapsed banks would likely need to face a substantial reduction on their debt claims. Specifics of any possible new plan for dealing with foreign creditors have not yet been publicized.

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