Iceland the 7th most competitive economy in the world

According to a new report by the World Economic Forum (WEF) published yesterday (September 28) Iceland is now the seventh most competitive economy in the world. Last year Iceland was number 10 and in 1997 it was number 38. Finland is in first place this year like last year, the United States in the second, Sweden comes third, and Denmark is number four. Then Taiwan, Singapour, and Iceland. After that Switzerland, Norway, and Australia.

Interesting enough, only three EU memberstates make it to top 10. The Netherlands are number 11, the United Kingdom numer 13, and Germany number 15. Estonia is number 20, Austria number 21, and Portugal number 22. Luxemburg is number 25, Ireland number 26, and Spain number 29. Other EU memberstates are lower on the list.

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The World Economic Forum


No change in policy, says Prime Minister Ásgrímsson

Davíð Oddsson, former Prime Minister of Iceland and now former Foreign Minister, left the Icelandic government and the Icelandic parliament formally yesterday. Halldór Ásgrímsson, the current PM, said on that occasion that there would be no change in the policy of the government after Oddsson's resignation. This includes the policy that membership of the EU is not on the agenda.

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Oddsson to leave Icelandic politics


The Icelandic state without any foreign debt

This summer the Icelandic government privatised the National Telephone Company and part of the amount the government got for it will be used to pay up the foreign debts of the Icelandic state. The results of this will be that in the beginning of next year the state will in fact be without any foreign debt.


The Northern Fringe: Better Out than In the EU

Icelanders are often told that Norway is on the way into the European Union. They have been getting this message for a very long time now, for decades of course without it ever coming true. Pretty much the same has been going on in Norway, only there the story is that Iceland is on the way into the EU. In both cases, however, it is highly unlikely that either country will join the EU in the foreseeable future.

Norway has rejected EU membership twice in referendums, first in 1972 and again in 1994. As a consequence the EU is not very eager to enter into new negotiations with the Norwegians. The pro-EU movement in Norway, too, has conceded that it is pointless even to consider new negotiations before there is a stable and vast majority for membership among the Norwegian people. At least 60% has been mentioned in that context.

On Monday general elections are being held in Norway. There is a rather peculiar political landscape in Norway when it comes to the attitude towards EU membership. Although the two traditionally largest political parties in the country, the Conservative Party (Høyre) and the Labour Party (Arbeiterpartiet), are in favour of joining the EU they cannot find a common ground to work together. So there are only two options when it comes to forming a government: a center-right government, including the conservatives and a couple of smaller parties, and a center-left government, including the Labour Party and a couple of smaller parties. These small parties of the right and the left are all opposed to EU membership so neither government will put the issue on the agenda.

As a result the EU issue has been almost completely written off in the ongoing election campaign in Norway. Since the rejection of the proposed EU constitution in France and the Netherlands polls in Norway have repeatedly shown a large majority of Norwegians opposed to the idea of joining the EU. This hostility towards EU membership is not making it more attractive for the Europhiles to raise the issue during the campaign.

However, because of the positive attitude of the two traditionally largest political parties in Norway towards EU membership there is always a certain ongoing debate in the country on the issue, including monthly polls. This is not the case in Iceland where the EU question has simply been as good as dead for years with the sole exception of the second half of 2002 and the beginning of 2003 when there was a short debate on the issue before the general elections in the spring of 2003. The result of this debate in the polls was a vast majority against EU membership.

Although it is highly unlikely that Norway will join the EU in the foreseeable future it is even less likely that Iceland will ever do so. Iceland does not have a pro-EU government nor a pro-EU parliament majority. In fact, only one of the political parties is in favour of joining the EU, the Socialdemocratic Alliance (Samfylkingin), although the party has never actually put the issue on its agenda.

It is not difficult to see why. Iceland is better out than in the EU. The recent United Nations report on living standards and wealth published only a few days ago shows Iceland in second place after... Norway. So why should both countries even consider joining the EU?

(Published before at the Brussels Journal)


Oddsson to leave Icelandic politics

Davíð Oddsson, Foreign Minister of Iceland and former Prime Minister, announced today at a press conference his decision to leave politics. He will not seek re-election as chairman of the Icelandic Independence Party after the party's biannual general meeting in October. He will also step down as Foreign Minister and MP on September 27 and instead become president of the Icelandic Central Bank. The vice-chairman of the party and current Finance Minister, Geir H. Haarde, will become Foreign Minister in his place.

Oddsson said to journalists that he had been in the line of fire in Icelandic politics for a long time as they all knew and he had decided that it was a time to step aside. Oddsson served as Prime Minister of Iceland for more than 13 years, from May 1991 until September last year when he became Foreign Minister. Before that he was mayor of Reykjavík from 1982 to 1991 and city councilor from 1974 to 1994. He is the longest serving PM in the history of Iceland and one of the longest serving PMs in Europe.

It is highly unlikely, and actually as good as impossible, that Oddsson's resignation will affect the policy of the Independence Party towards the EU in any way since that policy does not stand and fall with him. Opposition to EU membership is widespread within the party in all ranks of it.

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New EU poll in Iceland by Gallup

According to a new poll in Iceland by Gallup, published on September 1, support for EU membership in Iceland is now 43% and opposition 37%. According to the last EU poll in Iceland in February this year also by Gallup support for membership was 45% and opposition 34%. So the support has decreased by couple of percents since then and the opposition increased by 3%.

Support for starting membership negotiations with the EU keeps dropping as before and is now 55% compared to 91% in February 2002. Last February it was 59%. Some people in Iceland, who are nevertheless opposed to EU membership, obviously think we can start negotiations with the EU about membership just to see what it has to offer and then withdraw if we don't like what is on the table. That is, however, of course not an option from the EU's point of view.

Opposition to adopting the euro instead of the Icelandic króna remains high or 54% while only 37% support that. If only those who took stance to this issue are taken into the picture 59% are opposed to adopting the euro. Since obligation to adopt the euro is a part of joining the EU this in fact means 59% of Icelanders are opposed to EU membership. Obviously some number of Icelanders doesn't realise the link between EU membership and the euro. Something the eurosceptic movement in Iceland has to seriously look into.

No interest - no debate
But why have the political crises within the EU, as it seems, not affected the Icelandic people as for example the people of Norway? There seems to be only one logical explanation for this. For two and a half year there has been almost no debate in Iceland about the EU, unlike in Norway as I understand where there is always a certain ongoing debate. Therefore as a result what happens within the EU is more likely to affect people in Norway than in Iceland.

The question whether Iceland should join the EU or not simply seems to be almost dead among the Icelandic people - at least as it has been for the last couple of years or so. This is simply not high on people's list over the most important issues as it seems. What happens within the EU is something distant. After all Iceland is doing extremely well outside the EU.

However, the trend in Iceland has been that whenever a serious and active debate on the EU has started among the people, like before the last general elections in 2003, those opposed to EU membership have grown in numbers and in the end been in majority.

Finally, as a result of all this, the news coverage on the EU poll now has been without much interest and the common opinion of the Icelandic media is the same: Nothing new has happened in Iceland concerning the EU.


One of the most active spokesman of Icelandic europhiles

Eiríkur Bergmann Einarsson was recently appointed the director of the Center for European Studies at the Bifröst School of Business in Iceland. As such he gave a speech yesterday (August 31) at a Nordic conference in Turku in Finland where he among other things said that the EEA agreement was not as much in accordance with how the European Union had evolved today as it was at the signing of the agreement a decade ago. According to Einarsson this has resulted in putting Iceland and Norway on the 'sideline of European cooperation'. Einarsson opinion is, however, completely askew with the view of the Icelandic government and also the Icelandic people according to polls. The common notion in Iceland is that the EEA agreement is in full effectuality and working as it should be.

To shed a little light on this opinion of Einarsson it should be mentioned that he is a deputy MP for the Social Democratic Alliance and a former boardmember of the European Movement Iceland (stepped down only last autumn). He was also described on the website of the European Movement Iceland this summer as 'one of the most active spokesman of [Icelandic] europhiles'. Nevertheless, he constantly portraies himself as a neutral and independent commentor on EU related issues and as such is on regular basis in the Icelandic media.

Einarsson is admittedly quite well educated in European issues but he is nevertheless anything but a neutral commentor when it comes to the EU.