Bloomberg News

Iceland Reconsiders EU Snub as Government Awaits Report Findings

October 16, 2013

Iceland Finance Minister Bjarni Benediktsson said his country hasn’t yet decided whether it can commit to an election pledge to drop its European Union accession bid as it awaits the findings of a report.

“When the discussion on this report has been concluded, we will see if a proposal will be put before the parliament or not,” Benediktsson said yesterday in an interview in Luxembourg. The government’s probe is due to be finished by year-end and “parliamentary discussions can take place in January,” he said.

Iceland started EU membership talks in 2009 after the collapse of its biggest banks a year earlier left it reliant on an International Monetary Fund-led bailout. Though the nation initially sought refuge with the EU, Iceland’s economic outperformance since exiting its IMF program in 2011 has prompted lawmakers to reconsider.

Unpopular with Iceland’s 320,000 inhabitants from the get-go, the membership bid ran until January 2013, when the pro-EU Social Democrat-led government backed down on its commitment in the lead-up to April elections.

Benediktsson’s Independence Party and Premier Sigmundur David Gunnlaugsson’s Progressive Party, who formed the coalition that took over after April, both oppose joining the bloc.

By concluding a report on the accession process, Iceland’s government wants to “address the recent changes within the union, which have taken place since the application was put forward in 2009,” Benediktsson said. “First and foremost, that would relate to the further integration processes we’ve seen and how they impact our assessment of joining.”

The EU continues to welcome talks with Iceland should the nation decide to resume negotiations, according to an EU official, speaking on condition of anonymity. The European Commission believes that Iceland’s membership would be mutually beneficial, the official said.

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik at valdimarsson@bloomberg.net

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net


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