Is Reykjavik Steering Towards EU? Brussels Offers Hope for Crisis-Stricken Iceland
Iceland, the country hit worst by the global credit crunch, is about to get a €6 billion international rescue package. Meanwhile, the EU has said negotiations would be quick if Reykjavik wants to become a member state.
A drawing shows a man holding his head under an advertisement of Icelandic bank Landsbanki.
Iceland is currently on the verge of bankruptcy as a result of its severe exposure to the global financial crisis.
So far, the government in Reykjavik has rejected the idea of EU membership for the small Nordic state and its 300,000 inhabitants. But in the wake of the credit crunch, which has seen the country nationalize its three biggest banks, Icelandic Fisheries Commissioner Einar Gudfinnsson last week suggested his government might reconsider its position.
"Everyone knows that I am against EU membership," he said, before adding, however, that "today we should think about these things in a new light."
According to the Brussels policy Web site Euractiv, an Oct. 18 poll published by the Reykjavik daily Frettabladid showed that 70 percent of Icelanders would like to see a referendum on future EU membership. Currently, 49 percent say they would vote in favor of accession, with 27 percent rejecting it.
One of the main sticking points up until now has been the fishing industry, which comprises 30 percent of Iceland's exports and 5 percent of its total gross domestic product. In its EEA membership, it has an exclusion for agriculture and fisheries policies. If Iceland became an EU member state, it would be forced to adhere to Brussels' far more stringent fisheries directives.
The newspaper reports that people with knowledge of the talks say the IMF is expected to provide more than $1 billion, with the remaining contributions coming from the group of central banks. A spokesperson for the Icelandic government, however, refused to comment on the report.
The week-long talks follow an official request from Iceland for IMF assistance.
dsl with wires
© SPIEGEL ONLINE 2008
All Rights Reserved
Reproduction only allowed with the permission of SPIEGELnet GmbH