Reykjavík Grapevine - 12.01.2007, Blaðsíða 8

08_REYKJAVÍK_GRAPEVINE_ISSUE 01_007_POLITICS/ELECTIONS 007
Is it Time for Iceland to Join the EU and/or Adapt the Euro?
The Progressive Party has emphasised open and
honest debate regarding European matters. At our
last national convention, we decided to continue
gathering information and working to define our
aims in preparation for a possible membership talks
with the EU. The outcome will be presented at the
next party convention, where the party’s policy for
the spring elections will be mapped out.
European Union issues are most certainly in
the party’s limelight, just like in the society. Our
stance has been characterised by our belief that it
is important to have an open discussion about the
pros and cons of the EU. But before we address
the question of membership we should focus on
reaching a long-term balance in our economy. We
should discuss the pros and cons regarding mem-
bership on the basis of our strengths but not be
driven by our economic weaknesses.
Membership is not timely in our opinion since
it demands such long and thorough preparation.
We belief that we are fulfilling the obligations of a
responsible political party by watching the Union’s
development .
We need a straightforward discussion regard-
ing the future of the Icelandic króna and the influ-
ences of globalisation and open financial markets
in general. There is a certain development in the
business sector regardless of political will or the
party’s policy. We can’t close our eyes to the fact
that the króna is a small currency and the develop-
ment, we have seen among Icelandic companies
and in the Iceland Stock Exchange, shows that
the question of adapting or connecting us with
the Euro or other currencies is relevant. We must
watch the progress and have the interests of wage
earners and the economy as guidance.
The discussion regarding the European Union
and the Euro is an inherent continuance of the
European Economic Area membership, which has
proven to be good for Iceland. I predict we are
closer to a decision in this field than many foresee
today.
Sæunn Stefánsdóttir Candidate for the Progressive Party xB
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Ármann Kr. Ólafsson Candidate for the Independence Party
Sigurlín Margrét Sigurðardóttir Candidate for the Liberal Party
Guðmundur Steingrímsson Candidate for the Social Democratic Alliance
Katrín Jakobsdóttir Candidate for the Left-Green Movement
At one time, Icelanders carefully studied whether
it was in the nation’s best interests to become
members of the European Union. The conclusion
was that it was not. The main reason was that
Icelanders couldn’t submit to the EU’s joint fish-
ing policy as the nation would lose authority over
its fishing grounds. In light of that, it was decided
that Iceland would become a member of the EEA
treaty and at the same time a part of the Union’s
inner market. There is no doubt about the fact
that the EEA treaty has been an important part
of the country’s transition in economic and busi-
ness life in recent years. It also allows us to coop-
erate in the fields of education, culture and sci-
ence within the European Union. The contract’s
influences have therefore been manifold in de-
veloping the Icelandic society and economy and
proven its importance. It includes most of what
we need and there is nothing that really calls for
membership here and now.
Nonetheless, we can’t ignore that the rate
of the Icelandic Króna now is totally different
from what it was when the EEA contract was
made and the same can be said about the fish-
ing industry. The Króna and the fishing industry
have in common that their share in the Icelandic
economy have decreased in the wake of globali-
sation. The króna no longer reflects the economy
as it used to. Trading with it now mostly regards
betting on its interest rate and foreign exchange
listing. Such trading, where there is nothing else
underlying than speculation, has great effects
on micro-currencies like the Icelandic Króna and
causes great currency fluctuations. It is therefore
normal to reconsider our status in a changed en-
vironment. Whether this means that we adopt
the Euro or join the European Union, only time
can tell. It is certainly one possibility and probably
the most likely one, as long as the Union shows
understanding regarding our special position in
the fishing industry.
No, I don’t think it is time to apply for EU mem-
bership. I think it is a matter of whether we need
to and if the benefits are enough to warrant ap-
plying. As the situation is now, we are members
of the European Economic Area, and we have
done quite well there. We are also a young nation
and have had quite a period of growth in recent
years, we have done so without being dependent
on EU membership. We can easily participate in
European affairs without being EU members and
do fairly well.
To adopt the Euro is a matter that deserves a
closer look. Companies have started to present
their financial reports in Euros and that, I think,
is sort of a way for us to see if it is profitable or
not. If it is, we will just have to see as time passes.
I can well understand that companies began to
present their financial reports in Euros when the
Icelandic króna is not highly esteemed and the
state treasury’s credit rating is rapidly decreasing.
Many companies are now branching out into for-
eign markets and need the Euro, since the Euro
is apparently the name of the game in trading
with other countries at the moment, in Europe at
least.
To adopt the Euro as our main currency has to
be well considered. We can also learn from other
nations who have adopted the Euro. Is everyone
satisfied? For example ordinary people: do they
have more money than with their previous cur-
rency?
Yes, it is time to apply for a membership. By all
means, such an application would be to drag the
discussion in this country away from stereotyped
propaganda between two blocks – the European-
minded ones and the others – where the conflict
has often been battled with too many emotions
in my view and is stuck in a rut.
In the meantime, the majority of the nation
has stood by and scratched their heads in con-
fusion. This nation is in great need to decide its
view on the European Union and the Euro. The
balance of the Icelandic Króna is the newest ex-
ample of the need to seriously study, and without
prejudice, whether we would be better off within
the EU. High prices and enormous interest rates
are another example. The question is simple:
What are the real pros and cons? We need this
out in the open. The Social Democratic Alliance
believes that the benefits of an EU membership
and adopting the Euro are far greater than the
flaws. We, among other things, point to a good
experience with the EEA treaty, despite the op-
position it faced at that time. With that, we have
gone a good way towards joining the EU. The
Social Democratic Alliance alone will not drag the
nation into the EU and adopt the Euro though.
The subject needs to be discussed. The nation
needs to decide.
But to prove the Social Democratic Alliance
view that EU membership and the Euro currency
is worth it – and to give the others an oppor-
tunity to argue their logic against membership
– by all means, we need to put the matter on our
agenda and apply.
In the Leftist-Green Party, we have real doubts
regarding the European Union. We continue to
develop our relations with contracts regarding
business and cooperation, among other things in
the field of education, labour market and environ-
mental issues. It is clear that Icelanders can have
more influence on the European Union than they
do now and we can take Norwegians as our role
models in those matters.
An EU membership of course means for the
most part, relinquishing our self-determination
to Brussels and possible benefits from the mem-
bership doesn’t justify that. At present, about 20
percent of Icelandic legislation can trace its roots
to the European Economic Area’s legislation so
it is clear that an EU membership is a big step,
as with it, we would take up all of the Union’s
legislation. It is therefore not justifiable to argue
that as members of EEA we are almost members
of the EU.
Finally, we have had doubts regarding the EU’s
inner organisation, where too much centralisation
and bureaucracy are characteristic while democ-
racy is lacking in decision-making. The power lies
at the executive and even though the European
Union has gained increased power recently, the
executive is all the same the most powerful bat-
tery in the union. Therefore, it is not surprising that
participation in EU elections is sparse, people just
don’t see a reason to vote for MPs who work far
away and have a blurry domain. This doesn’t go
hand in hand with our idea of democracy, which is
to bring decision-making closer to the people.
Regarding the Euro, I think it is clear that
adopting the Euro must be closely related to EU
membership if we want to get its benefits. By do-
ing so, the currency control would move out of
the country, which some think is good considering
existing governance. But we don’t think that the
blame for irresponsible expansion policy of local
authorities in economic matters can be put on the
Icelandic Króna!
In the build up to the 2007 parliamentary elections, The Reykjavík Grapevine will be asking representitives from each of the political parties to answer questions regarding the most pressing issues.