LETTERS TO THE EDITOR
Benediktsson on Olli Rehn's "Charting Europe's changing shape"
Summer 2009
Sir,
Iceland was hit early and hard by the global financial crisis, and the nation’s financial system very nearly collapsed. So Icelanders aren’t about to argue with Olli Rehn when he says that long-term economic and financial stability requires stronger global governance. I also agree that the European Union can lead the way, but that will require more unity, direction and purpose than sometimes seen in the past. The EU may also be well placed to protect its citizens’ welfare in times of crisis, as Rehn says. The Union will, however, have to play to its strengths if it hopes to capitalise on this unique position to tackle the transnational problems facing Europe’s people and member states.
I welcome Commissioner Rehn’s warm words about Iceland. It’s good to know he thinks accession negotiations could make quick progress if Icelanders decide they want to belong to the Union. Iceland has been part of the Single Market since 1994 and the Schengen Area since 2001. But it should be recognised that Iceland’s advanced state of economic integration with the EU is actually a source of weakness when times get tough. Iceland is integrated into EU capital and financial markets, but lacks adequate tools to deal with major crises. Above all, our currency is vulnerable and we have no credible lender of last resort. Iceland is like an open trailer hooked onto the EU car. It’s a comfortable ride in good conditions, but dangerous in a storm on rough terrain.
It is interesting that Olli Rehn underlines the importance of continued enlargement irrespective of the present economic difficulties. However, it is also important that the EU continues to respect the individual circumstances of candidate countries. This means that policies tailored to meet the demands of the EEC in the early 1970s may need to be adapted in light of the EU’s changed composition and other developments. As Rehn suggests, fisheries would be a considerable challenge were Iceland to seek EU membership, partly because the fishing industry is the foundation of Iceland’s prosperity and partly due to the nature of the Common Fisheries Policy. Agriculture, too, presents different problems in the far north-west of Europe than in other parts of the EU. As the Commissioner says, only the Icelandic people can decide whether they wish to apply for EU membership. I believe that political leaders in Iceland must actively involve the people and other interested parties in a constructive and conclusive debate on the issue.