Iceland and joining the EU after the banking collapse of 2008

Wednesday, October 22, 2008

Iceland's changing view towards the EU as a result of the collapse in the banking sector has been really interesting. First we have the country getting a $6 billion bailout from the IMF, which is almost a third the size of their entire economy ($21 billion, I think). That of course has caused a great deal of discussion about whether Iceland should have a referendum to join the EU, where now 70 percent want a referendum on joining and 50% support becoming a member.

At the same time, you have an article like this one where it seems that Ireland saved itself from a similar fate through being a member of the bloc:

Irish Prime Minister Brian Cowen said EU membership, and being part of the euro zone of 15 nations that have the euro as a common currency, had shielded Dublin from much of the fall-out from the global economic downturn.

"On the financial front, Ireland would have been in a far worse position had it not been for our membership of the EU, the euro and the role the European Central Bank played in recent weeks and months," Cowen told reporters on Thursday.

Without EU membership, he said, Ireland could have ended up in a similar position to beleaguered Iceland where a crisis stemming from huge debts taken on by its main lenders has brought down the banking system and made the local currency virtually untradeable.

And of course, since Iceland is a modern democracy with a developed economy and no cultural problems with the EU, its entry would be a very simple matter; about a year would suffice according to another article. It would also make Norway the sole holdout of the Nordic nations.


  © Blogger templates Newspaper by 2008

Back to TOP