Fairly meaty news day today.
EUROPEAN UNION
First, the EU has declared that Iceland is fit to join their club provided we tweak our policies and administrative structure a bit. If we do, they will kindly allow us to discuss potential accession. They have a few, um, criticisms about how things are done here. [I’m shocked!]
First of all, they would like to see the Icelandic courts made more independent than they currently are, in particular by ensuring that a political minister cannot appoint judges. [People, this is very good news, so score one point for the EU.] The judicial system in this country is so inextricably intertwined with the mafia that has ruled here the last several decades that it’s scary. In fact just a few years ago a justice minister for the Independence Party appointed Davíð Oddsson’s son a district court judge, even though he was less qualified than other candidates. Need I say more?
They also insist that Iceland adapt its legal environment to that of the EU in the fields of fishing, agriculture, settlement and environmental matters, free flow of capital and financial services. Among other things.
Anyone up for some bedtime reading about the EU’s stance on Iceland can download their report here.
SPECIAL INVESTIGATION INTO THE COLLAPSE
Justice Minister Ragna Árnadóttir revealed today that a total of 120 170 people have been interrogated in connection with the bank collapse, and 40-50 of them are being treated as suspects. The Office of the Special Investigator has conducted 50 raids on premises in Iceland, the UK and Luxembourg.
Indeed, the raids in Luxembourg a couple of weeks ago went on for four or five days, sometimes well into the night. Icelandic investigators were assisted by the Luxembourgian police. Apparently there are very strict laws about this sort of thing in Lux and only ONCE before has a special exception been made to allow an investigation of this scope to take place. That was in the Bernie Madoff affair. You can draw your own conclusions from that one.
Anyway, it’s good to know they’re not just sitting on their butts doing nothing.
FRÉTTABLAÐIÐ EDITOR FIRED
Jón Kaldal, who has been editor of Fréttablaðið for a number of years, was unexpectedly sacked this morning. Ólafur Stephensen was hired in his place. Ólafur was previously editor of Morgunblaðið, until he was ousted in favour of everyone’s favourite chump, Davíð Oddsson.
Still not sure what to make of that one, but keep firmly in mind that Fréttablaðið is still owned by one of the oligarchs – Jón Ásgeir Jóhannesson. Ólafur has announced that he will be placing greater emphasis on news analyses and a paper that sides with the “little people” as consumers and taxpayers. Unsurprisingly this is kind of like the image that Jón Ásgeir and especially his father Jóhannes Jónsson have always striven to present through Bónus – the discount supermarket they launched here just over 20 years ago and which, for a time, made them into national heroes.
Egill Helgason speculates that perhaps it’s just that Fréttablaðið lacks character as it is first and foremost an advertising medium, and this is an effort to shake things up a bit. Can’t say I buy that one. The “little man” reference rings my alarm bells – I think this a careful ploy to prop up JÁJ and JJ’s image. That said, Ólafur Stephensen is an excellent journalist and did good things over at Morgunblather, and he’s always seemed to me a man of integrity. But then again, no doubt he needs to work for a living like the rest of us, and can be recruited at a price.
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OK. Regarding the EU. Does anyone realise that EU rules for entry limits public debt to 60% of GDP? So how is that going to work with Iceland? If, let’s just say, Iceland ratifies some form of the current, as Alda puts it, THE BLOB agreement, then debt to GDP (even in the case that interest rates are say 3 or 4%) will still be around 200%. (DO NOT PASS GO.) Sorry, Iceland does not meet criterion. No one believes that the EU is going to make an exception, do they?
Now call me suspicious, but how is this going to work?
Iceland cannot PASS GO no matter what: If they don’t reach an accord with GB/NL, no entry; if they don’t fulfill EU rules, no entry; and besides, if any One of the 27 EU states says no, no it is.
If you ask me, this is all just carrot dangling. Could it be a coincidence that Althingi is up to its eyeballs in THE BLOB?
Then, there is the issue of whether joining the EU/Euro could really be beneficial to Iceland (look at the plunge of the Euro right now). Frankly, I think Johanna and Co. are looking for anything they can get. Naivete isn’t even in it .
Anyone up for grabs?
BTW, Alda – and I don’t say this to schmooze – if it weren’t for your faithful reporting, no English-speaker would know a bloody thing. Keep up the fab work!
Thank you, Laurence. BTW I have a “donate” button in the right sidebar. Just sayin’. 😉
>limits public debt to 60% of GDP?
Thats for entry for the Euro, not the EU. I don’t think there is a limit on debt for EU entry.
Man, you’re a good saleswoman too!
We need to talk…seriously.
Well, you know. The content doesn’t write itself.
Laurence, Iceland is just starting the application process now, I do not think Iceland will join until it meets the entry criteria.
An EU application is not seen as a way out of the current mess, it is seen as away to ensure that something like this does not happen again.
But it is also a fact that the EU have been trying to entice Iceland for the last 20 years so.
>limits public debt to 60% of GDP?
That didn’t stop a few other countries that tweaked their way in, when plainly there were not ready, or matching the entry criteria.
It would be foolish in the extreme to join now, almost as an over-reaction to the recession.
Canadians may be happy. Their coast guard would presumably have less work to do, as the Spanish fishing fleet would be illegally over-fishing Icelandic cod waters, rather than Canadian, I assume.
Joining the EU – its what politicians propose when they run out of ideas.
Peter,
Very true. But surely one of the key rationale in Iceland joining the EU is the currency? What can you do with the Krona – er, sorry what will you ever be able to do with the Krona? (Unless Iceland strikes oil.)
And just a thought: What other advantage could Iceland get from joining the EU? I mean, look at Greece.
Oh, I know. I know. Check your PayPal inbox.
@Laurence
entry in the EU does not mean entry in Eurozone: for that, in theory you have to submit to further binding conditions. You can stay out of the euro, no one’s forcing the swede, english and danes to go for it.
As for adapting completely, barring some opt-outs, to the EU legal system, that goes without saying: it is, eventually, if and when, Iceland that wants to be part of EU and not the contrary.
Some idiots would cry “they want to impose their laws!”: it’s a matter of harmonization and legal certainty, big and little acceding countries had to accept. And nobody forces Iceland to be part of EU.
Look at Norway: their government tried to have the country part of the EU TWICE and twice the norvegians rejected the thing (I wonder what’s the point of having a goverment if it does not mirror the people’s will…norvegian eccentricities) and I can see why.
And they lived happily everafter…
Sigvaldi,
I understand the ‘thinking’; only seriously, does anyone think that the UK, Spain, Ireland or Greece are in less of a mess than Iceland? All respect intended, of course. And: In the years that it takes Iceland to finalise EU entry commitments, what will the world look like then? An Icelandic friend told me recently: ‘The general feeling is that the Althingi is just working from hour to hour, day to day, without thinking about the big picture. They just say, ‘We’ll worry about tomorrow later. No we have to think about today.'” Honestly, forward planning isn’t even in it.
And, Michael:
Couldn’t agree with you more.
Now is the time to call in all forces, pool resources and come up with f***ing amazing long-term plan – oh, and believe me, there are Icelanders who have the where-with-all. Right now all the ‘powers that be’ are doing is delaying the inevitable. But, I hate to say it, it seems to be a trend all over the world. Sigh.
@Sigvaldi Eggertson
“Iceland is just starting the application process now”
not in Brussels AFAIK
“An EU application is not seen as a way out of the current mess, it is seen as away to ensure that something like this does not happen again”
are YOU sure? Laws are just tools: even the best tool in the hands of a fool (or a crook) is useless… salvation is in responsibility, not in piece of papers
“But it is also a fact that the EU have been trying to entice Iceland for the last 20 years so”
look, fish is good, but not THAT good. And EU has already some fish somewhere.
But if you are right, gee, tomorow the EU will immediately apply to be part of Iceland, or at least be Iceland’s satellite applying for entry in the IEA: Icelandic Economic Area 🙂
If you had oil or gas, LOTS and LOTS of those, on the other hand… but Norway has refused 😉
Regarding the EU proposal: This looks like globalization of Iceland’s agricultural sector, fishing sector, and possibly even oil exploration and gas exploration energy sectors. What are the benefits? It was interesting to see that the EU document commented upon the impact of this on the EU, not on the Icelanders in the Conclusion sections I read. If I were an Icelander I would not want to give up my ability to control sustainable living conditions (by regulating the food, fishing, energy sectors through my own government). It requires a faith in your own system of living and governance just when you are feeling doubt about the honesty of the whole system. This would be a good instance for Icelanders to say, “No. Thank you. We are doing fine. Just need a bit of time to reorganize our banks and put some bums in jail.”
@Laurence
“But surely one of the key rationale in Iceland joining the EU is the currency? ”
then it’s a key irrationale since even IF admitted tomorrow, Iceland could not adopt the Euro, in the present shape for long, long time. VERY long.
Eurozone has already its own mess to clean, why have more?
Unless of course Iceland strikes oil and gas. LOTS and LOTS of those: but then of course you would not need the EU 😉
Again, don’t be fooled by the Euro as panacea: it’s an asset and a liability,
“What other advantage could Iceland get from joining the EU? I mean, look at Greece”
I’m not sure about the meaning of your phrase. You do not apply to the EU just to have the Euro…
And the case of Greece is complicated by the Euro, but they would be in trouble even without the Euro anyway
@Laurence
“does anyone think that the UK, Spain, Ireland or Greece are in less of a mess than Iceland?”
well, I do: surely they’re not that healthy but I think Iceland would pay dearly to be in Greece’s place (with or without the Euro). And Greece is really in BAD waters… of course everything is relative.
Don’t forget Italy as well (PI2GS… :))
Lino,
Every major Icelandic export is in debt. Yes, Iceland has fish, but so many of the quotas are pledged for loans. Aluminium and geothermal? Well, nothing going – in debt. So, what’s up for grabs, folks? What will joining the EU help anything? It will just give easier access to anything that still has asset value. I may be exaggerating, but there are possibly ‘ten’ Icelandic companies that have anything to offer the outside world (which are not highly leveraged or foreign-owned); and Lord knows how long they will stand for this charade; some of them are already thinking about relocating.
There’s only one option: Scrub everything and start from scratch.
Forget the EU and the Eurozone, forget the US of A (don’t imagine Hillary and Ossur will be the best of buddies soon) – and besides the dollar is about to tank; become independent as quickly and as humanly possible.
Only, somehow, this thing is going to drag on for a long long time…
By that time there’ll be five thousand left working the geothermal energy, fish, aluminium, hydroelectric to cover whatever’s still pending. Everyone else will be citizens of other countries.
Unless…
Green energy and lots and lots of clean water, that’s what EU sees.
look just what popped up stateside from the not-so-weighty NY Daily News:
https://www.nydailynews.com/ny_local/2010/02/24/2010-02-24_posh_icelandic_couple_sued_for_putting_ikea_kitchen_in_swank_gramercy_park_hotel.html
Elín – not sure I get it. Did they rent it out to other people, and those people are upset that the kitchen was not up to standard and all those other things were not OK?
In any case it’s a pretty hilarious report. Especially the part about the chicken wings. 🙂
Elin,
Are you trying to ‘lighten’ the conversation?
Yes, I saw it. Jon & Ingibjorg have a way with style, PIIGS and, er, credit? The ‘style icons’ of Iceland in every way…
Lino,
Why then, should Iceland be interested to be in the EU?
And tell me? Why is it better to be Greek than Icelandic right now?
Because eventually Germany will butter your toast?
Check out today’s coverage of Greek happenings by the BBC.
Really, do any of you really think that any of this is going to lead anywhere except into further indebtedness?
@Laurence
I completely agree: the thinking should not be “EU for EU sake” or “EU cause we have nothing else and even then we’re not sure it’s worth it…”.
The case for Iceland in the EU was already unclear even before the present mess, and now… 🙁 too many variables, too many liabilities: a reasoned choice, beyond slogans and easy simplifications, is even more difficult.
Actually, in my humble opinion, the “apply to membership EU” option is a distraction that Iceland should do without: nothing is coming that way in the short or mid term. Even just thinking, debating, negotiating and probing for application is a waste of time/energy that should be focussed on “better” options.
You don’t want to know what I think is going to happen to Iceland (in the field of pure socio/economic speculation) but you are right in one regard: icelanders should “Scrub everything and start from scratch”. Starting from their way of thinking and seeing life.
From the EU-report: “…The conclusions of these evaluations have generally been that corruption is at a low level in Iceland.”
As you see, nothing about “the mafia that has ruled here the last several decades”, they seem to be used to higher levels of corruption. So, Iceland would fit in smoothly in this respect.
Apparently, there is a continuing competition going on, for becoming the darling of the “little people”. Davíð Oddsson had proposed laws exclusively for them, as quoted here:
https://icelandweatherreport.com/2010/01/doddsson-hauls-out-the-ammunition.html
And now, JÁJ’s newspaper is going to side with them, too. I suppose, in the end most of the 40-50 suspects will be on the side of the “little people” and you might start wondering, how the country could have been run into the ground with so much empathy.
@Laurence
“Why then, should Iceland be interested to be in the EU?”
I never said Iceland should be interested to be in the EU, actually I think that such an idea should be frozen since it’s a waste of time/energy for Iceland even to debate such question.
“Why is it better to be Greek than Icelandic right now?
Because eventually Germany will butter your toast?”
to give a simple answer, yes. Of course it is not that simple, but that is the likely scenario (not certain however, there are little games of brinkmanship inside the Eurozone itself, I do not keep things for granted), supposing the Greece is the only Eurozone economy risking default.
Iceland is alone. No if, no but. Unless you remotely hope for Norway or any scandinavian state to come to your rescue.
Greece, unfortunately for all Eurozone but Greece, is not.
@Laurence
“Check out today’s coverage of Greek happenings by the BBC”
if you are referring to strikes and clashes, yes: so what? That is expected.
I think even worse will happen in Greece.
So what?
@hildigunnur
“Green energy and lots and lots of clean water, that’s what EU sees”
for 300.000 Icelanders perhaps that is a lot, for 300.000.000+ EUropeans you think that is a great deal?
For sake of argument, how could you monetize “green energy and lots and lots of clean water” on a remote island in northern atlantic?
If it’s such big asset, where is the queue of buyers ready to buy and/or invest in Iceland?
It’s like owning a ton of gold on the moon: on earth it’s not worth much.
There is only one objective concept of value, that is the “exchange value” (a sale for example): if you do not have a willing buyer, it’s worth nothing.
Lino,
We seem to be on the same page.
Absolutely agree that worse will happen in Greece, Spain, the UK, Portugal, Ireland, and – God forbid – even the US (eventually).
And yes, a few riots – nothing. Come on they’re warriors, just like the Vikings (whoops). I’m no economist, but if you study what certain survivors (such as Michael Faber) are saying, it appears we’re all (and I mean All – China included) in for a much harder ride in 2010/2011/2012. The problem is the light at the end of the tunnel is years away. The bubble hasn’t even burst yet.
Meanwhile some people think satisfying the IMF, Icesave Agreements and initiating EU procedures is going to – put things right. It’s truly hard to fathom. Time to find a little island where things are simple…(Hmm.).
Everyone has simply expressed their view/belief/dogma which seems in the main to be anti EU. No one has stepped back to suggest the consideration of all factors in the context of Iceland, what is the evidence for and against. Where I live in Merseyside, without EU Special Funding our local economy would never have recovered from the disastrous politics of the 1980’s. Now people are moving back into Liverpool, the young and gifted staying. I have worked with projects dealing with social disadvantage across the EU and we have benefitted from looking outwards, from linking up with other Europeans. It’s good to have beliefs and attitudes challenged. Of course there’s a lot that needs changing in the EU. But there are plusses too. It’s too easy in the heat of the debate to throw the baby out with the bathwater.
sylvia from viking wirral
re: JAJ property in NYC. It looks like it was rented to a realty group, who might of then attempted to lease it out to another party or use it for entertaining or do whatever people with big New York City money do. Somewhere in the process someone overlooked the fact that, mon dieu, the kitchen was outfitted by IKEA. Lawsuits ensued! The chicken wings over the balcony was the funniest part, though.
Just saying, no one is talking about Luxembourg. The country is a happy member of the EU and the eurozone, with a population about the size of Iceland, with also a highly subsidized agricultural sector, an industrial sector (steel vs aluminium) and of course a successful banking sector, not to mention a “judicial system inextricably intertwined with the financial mafia”.
So yes Luxembourg could be in all respect a role model for Iceland.
Otherwise good luck with the Icelandic Krona (I loved that cover of Reykjavik Grapevine in 2008 with a 1 kr coin featuring a dead fish… a future collector).
I love this bit, from ‘The Telegraph’ today:
Hans-Werner Sinn, head of Germany’s IFO economic institute, said Athens was holding Euroland to ransom, threatening to set off mayhem if there is no bail-out. “Greece should never have entered the euro zone because they did not qualify and they are now blackmailing other European countries via the euro. It’s not for the EU to help Greece. We have an institution that is very experienced in bailing-out activities: the IMF,” he said.
And some posters, would do well to re-read the bit “and they are now blackmailing other European countries via the euro. “
“Green energy and lots and lots of clean water, that’s what EU sees.”
Iceland production of Geothermal is about 550Mw. Italy’s is 750Mw.
UK currently has over 4000Mw of wind power, 1800Mw under construction and 7500Mw planned for construction.
The EU is targeting 75GW for the next few years in wind power alone.
Iceland ability to proved 0.5Gw several thousand miles from where it could be used is irrelevant. Plus, geothermal isn’t free, it more expensive than wind power.
As for water, same problem. Its too expensive to pipe it from Northern England to the South so it crazy to think Icelandic water is any use to anyone but Icelanders. Plus desalination technology has moved on, its far cheaper to make in-situ.
what is in for iceland joining the eu…i think a lot.
+the biggest advantage is to get rid of the mickey mouse money aka the ISK and convert it into EUR (may take some time but at least it gives the people here in iceland some kinf od road map for the future)
+icelandic farmers can also highly benefit from agricultural subsidies paid by the eu (look at all the mountain farmers in spanish, french, german and austrian alps who can only survive by these subsidies) the subsidies for the few farmers supplying 300.000 peeps on an island are a piece of cake for the eu.
+the costs of living in iceland will drop significantly due to more competition in the retail sector
+in most cases each member state gets a eu ministry located in its capitol…if iceland negotiates well it can play a key role in eu fishing policies and maybe get the eu to move such a ministry to reykjavik
>the costs of living in iceland will drop significantly due to more competition in the retail sector
Is this true? Don’t they already get that from the EEA?
Also, when I saw that Icelandic was going to be an official language, I did wonder if it would save the EU money to pay the Icelanders to stay out 🙂 .
I did wonder if it would save the EU money to pay the Icelanders to stay out — Heheheh.
Seriously, though, it is already acknowledged that in case of EU accession there would be a serious shortage of translators and interpreters in this country. Iceland would need around 200 translators instantly. So – Klondike fever for me and my colleagues … that is those who manage to stay awake over those ghastly dull EU texts zzzzzzzzzzzzzzzzzzzzz …..
Damn it, I knew I should have studied Icelandic instead of Basque!
If the key rationale of Iceland joining the EU is the currency, I am starting to wonder, if Iceland is going to bet on the wrong horse. The Euro might be dead by the time Iceland is ready to apply for membership in the Euro-zone. The situation for new applicants has changed considerably since the problems with the PIIGS emerged. The bailout scenario for Greece is extremely unpopular in Germany and it’s not just the somehow freaky head of the IFO economic institute, who are doing finger pointing jobs and expressing their anger about this – which is unfortunately bound to cause frictions between the nations. So, the willingness, to take up new members into the Euro club should not be estimated too high.
The “green energy” is usually not so green at all, seeing the environmental damage caused by projects like the Kárahnjukar hydropower scheme. Even less green are the proposed methods for utilizing this energy by means of heavy industry symbols like aluminium smelters. And I would think, that the EU is seeing the fish as well. There may be some good reasons in favour of EU membership but I think, Iceland should be extremely wary.
I wasn’t going to mention it, but the EU report did point out the real reason for its interest Iceland joining the EU. Access to the Arctic.
Now, if the EU wants to pay the Icesave debt, please … feel free.
https://www.nytimes.com/2010/02/25/world/europe/25iht-union.html
Look under the fishing section of the full report.