I think not. In fact I think its fair to say that we’d be
better off outside of the EU than within. Why – because it’s becoming increasingly
clear to me that many people here in Iceland seem to think this
will be the solution to all our problems.
But the thing is EU or not – we still have to deal with the
same immediate problems. Entering the EU is not an overnight
process. It takes years and in the meanwhile we still
- Interest rates that are bleeding out both the industries
and the homes.
- Un-usable currency (could be solved by other currencies
than the Euro)
- A fiscal policy which has had government spending growing
out of all proportions in the last few years of the economic
boom. Leaving us with a required cut of 150Bn in the near term
- A tax base which needs a kick start – with somewhere in the
region of 70% of the companies technically bankrupt and homes
which have taken significant hits on their income. That in
combination with the debt burden which has risen tens of
percents does not signal revival soon.
- No real lender of last resort, last year our Central bank
showed that it does not have any means to be a lender of last
resort for the Icelandic banking system
- A banking system in shambles
… and so much more
A classical “scare” tactic is to mention the EU’s Natural
Resources Policy (i.e. the Fisheries policy) which would mean
that most likely we’d loose saying over our stock of fish. I
think there is real danger here which should not be
Another thing worth mentioning is that since Iceland isn’t the
biggest of economies with in the Eurozone its highly likely
that economic fluctuations would be increased since our economy
does not fluctuate in sync with the German one. This means that
in an German upswing and an Icelandic recession the European
Central bank would likely increase interest rates to hamper the
German economy with with greatly adverse effect on the
As a solution to one of our problems we could look at other
currencies such as the Euro or the Dollar. Just look at what
parts of our trades are done in dollars, oil,
aluminium/electricity etc.. it is definitely worth doing
further analysis of how we’d be received by NAFTA/Dollar if for
nothing else than leverage in negotiations with the EU. But
this is a long term project.
Icelanders are a growing nation unlike most of Europe. In most
of the developed world the nations are just growing old and
people and its foreseeable that the younger generations will
not be able to sustain quality of life they’d like for their
So what do we really need?
What Iceland needs is a complete change in the industries. We
need to move out of primary production such as catching and
packaging blocks of fish or smelting bauxite into aluminum. We
need to get into secondary production and services. This will
reduce economic fluctuation and the effects of fluctuation
revenues based on our natural resources.
We need to select carefully where we spend the renewable energy
we have – not just dump it at the next aluminum smelter that
some foreign investor wants to build.
Which do you think will be more valuable in the future, a
product labelled as “Produced with sustainable usage of
renewable energy” or one that is not?
We need to carefully select where we invest our energy for the
long-term. We need a strategy for the future – not quick