EU-DIGEST

EU opens the door to Iceland

Iceland could "quickly" join the EU if it decided to apply for membership, the bloc's Enlargement Commissioner Olli Rehn said yesterday (20 October 2008), as the country reconsiders its opposition to accession in view of the financial crisis, which has brought the island to the brink of bankruptcy.

"Iceland is clearly a democratic European country," which has "already negotiated perhaps two-thirds" of the criteria needed to join the current 27-nation bloc, Rehn told AFP. "This means that were Iceland to pose its candidature, we could quickly complete the negotiations," he said. Iceland was an early member of the European Free Trade Area (EFTA) and through 1994's European Economic Agreement (EEA) applies most of the bloc's single market legislation, with the notable exceptions of agriculture and fisheries. The EEA also allows Iceland to participate - albeit with no voting rights - in a number of EU agencies and programs, covering enterprise, environment, education and research. Furthermore, Iceland is also an associated member of the Schengen zone, providing for passport-free travel within most EU countries and Norway.

Labels: EU, Iceland

For the complete report from Radio Netherlands Worldwide click on this link

A growing number of Dutch provinces and councils have revealed huge investments in the now-bankrupt Lehman Brothers bank and in Iceland's failed financial institutions. The Dutch government says that more than 250 million euros worth of taxpayers' money was invested or deposited in now-bankrupt financial institutions. It is not yet clear if it will be possible to get any of the money back. The hardest hit province is North Holland, it had 100 million euros invested with Lehman Brothers and Iceland's Landesbanki. Groningen has also been hard hit; it had 30 million euros deposited in an Icelandic bank. With 15 million euros deposited in Landesbanki, Amstelveen tops the list of municipalities facing huge losses. Texel stands to lose eight million, while Opmeer is facing losses of seven million. The authorities in Opmeer say they could be facing serious problems if they do not get the money back. The cabinet is considering measures to help regional authorities experiencing difficulties. Finance Minister Wouter Bos says that in future, provincial and municipal authorities should not be allowed to invest taxpayers' money themselves and recommended that money be deposited in the Dutch Municipal Bank.

Labels: Economy, EU, Iceland, meltdown, Netherlands

Iceland secures €200m from Norway, Denmark - by Angela Jameson and Steve Hawkes

Iceland secured €200million (£156million) from Norway and Denmark yesterday as it sought help to stablise its stricken economy, but talks to secure a far larger loan from Russia continued. It also emerged yesterday that the country, which has been forced to nationalise its banking sector, is only one of several asking the International Monetary Fund (IMF) for financial assistance. According to reports, Hungary, Ukraine and Serbia have signalled that they need help, too.

Labels: Denmark, Iceland, Norway, World Economy

Netherlands, Iceland reach deal on deposits

The Dutch and Icelandic governments reached an agreement Saturday over how to compensate Dutch depositors at one of Iceland's troubled banks. Under the deal, the Icelandic government will compensate each Dutch depositor up to a maximum of 20,887 euros (US$28,281.6). The government of the Netherlands is offering a loan to Iceland to make that possible. The money will go to those holding accounts with IceSave, an online company that was part of Landsbanki, an Icelandic bank recently put into receivership.

Labels: EU, Iceland, Netherlands

ICELAND - The party's over for Iceland, the island that tried to buy the world - by Tracy McVeigh

Iceland is on the brink of collapse. Inflation and interest rates are raging upwards. The krona, Iceland's currency, is in freefall and is rated just above those of Zimbabwe and Turkmenistan. One of the country's three independent banks has been nationalised, another is asking customers for money, and the discredited government and officials from the central bank have been huddled behind closed doors for three days with still no sign of a plan. International banks won't send any more money and supplies of foreign currency are running out. People talk about whether a new emergency unity government is needed and if the EU would fast-track the country to membership. On Friday the queues at the banks were huge, as people moved savings into the most secure accounts. Yesterday people were buying up supplies of olive oil and pasta after a supermarket spokesman announced on Friday night that they had no means of paying the foreign currency advances needed to import more foodstuffs.

This North Atlantic volcanic island, which is the size of Cuba, with a population of 320,000 - the size of Coventry's - is an unlikely player on the global financial stage. It is famous for its fish, geysers and for winning the UN's 2007 'best country to live in' poll. But Iceland built its extraordinary wealth on the crest of the worldwide credit boom and now the crunch is sweeping it away, bankrupting a people for whom the past eight years have been, for most of them and by their own admission, one long party.

Labels: Economy, Iceland

What Iceland Can Teach America - by David Yarnold

Iceland's commitment to harnessing renewable energy resources is absolutely inspirational. Their use of geothermal power is groundbreaking. As much as 70% of Iceland's total energy (and 100% of its electricity and heat) comes from renewable energy. This is the highest percentage of any country in the world and puts Iceland on track to meet its goal of providing 100% of its energy needs from zero-emission renewable energy sources before mid-century.To complete their mission, Iceland plans to use geothermal electricity to split hydrogen from water and use hydrogen fuel cells for its fishing fleets and transportation sector, the last industries in Iceland still using fossil fuels.

Labels: Alternative Energy, Europe, Iceland, US

Iceland: Icelandair cuts winter flights to Halifax

“In order to secure future growth in Nova Scotia and despite our intended goal of year-round service, Icelandair regretfully announces it has become necessary to suspend winter service from Halifax, Canada. This adjustment is a reflection of broader strategies within the entire company; departments, employee numbers and schedules are being decreased in an attempt to streamline work processes and reduce costs. These actions are the result of external economic factors that could not be foreseen when the service was launched. As scheduled, Icelandair will operate three flights weekly through August 30, 2008, with two flights weekly until October 20, 2008, when service will be suspended. Service will then resume with two flights weekly beginning May 14, 2009, and with three flights weekly beginning June 13, 2009, until August 31, 2009. Flights will then return to two flights weekly September 1, 2009".

Labels: Airline Industry, Canada, Fuel Costs, Iceland

Iceland feels heat after years of growth - by David Ibison

Investors are wondering whether Iceland could be heading for a bout of financial turbulence.The reason for the growing scrutiny of a country with a population of just 300,000 and an economy 0.1 per cent that of the US is the perceived risk associated with its phenomenal growth. Its economy might be the smallest in the Organisation for Economic Co-operation and Development, but it has GDP per capita of $40,000 - the sixth highest. Fishing remains the most important source of export revenue but its share of GDP has declined from 16 per cent in 1980 to 6 per cent last year. It has been replaced by finance, insurance and real estate, whose combined share has risen from 17 per cent of GDP in 1998 to 26 per cent in 2006. Unsurprisingly in this environment, Iceland's three main banks have boomed. Glitnir, Kaupthing and Landsbanki had total assets of more than EUR110bn at the end of 2006, eight times the country's GDP.

Labels: Economy, EU, Iceland

Iceland ranks top in happy citizen table - by Duncan Campbell

Iceland is the leader in a league table judging the European country best able to give citizens a long and happy life. Estonia comes bottom of the 30-nation survey while the UK lurks below Romania, at number 21 in the chart.

The European Happy Planet Index used carbon efficiency, life satisfaction and life expectancy to rate the countries. The survey, published by the New Economics Foundation and Friends of the Earth, reveals that Europe is now worse at creating well-being than it was 40 years ago.

Labels: Iceland