Iceland and the EU

1
Iceland and the EU

• Hlynur Olason

2
Background

• The first settler arrives in 874(unlike America
  there was nobody there before!!) from the Western
  Coast of Norway.
• Before they come over to Iceland they raid the UK
  and Ireland (mostly Ireland) and take loot and
  women with them!
• By 930 the country is mostly settled, by only
  around 60.000 people
• Year 1000 we take up Christianity, pretty
  peacefully.
• The Political system, which has been dubbed the
  Icelandic free state is anarchistic in a way
  that there were courts and a Judiciary but no
  executive.
• The system works alright in the beginning (if you
  dont count all the revenge killing).
• It however leads to a civil war in the 13th
  century, which however only leads to Iceland
  going under Norwegian monarchy in 1262
• In 1397-1524 Iceland was under the Kalmar Union,
  then under the Danish-Norwegian monarchy (in fact
  Denmark because the power was in Copenhagen)

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Background (2)

• Pretty much since the end of the Icelandic free
  state until the 20 century, Iceland is a basket
  case!!!
• In the 14-15 century the so called little Ice age
  begins and a long downslide begins, with famines,
  plagues and finally culminating in the year 1783
  with a volcanic eruption of Laki. We lose
  almost a third of the population.
• In the 19th century, nationalism hits the Country
  and the battle for independence begins. In 1918
  Iceland gets sovereignty but keeps monarchic
  relationship with Denmark
• Iceland is occupied by the British in 1940, and
  then by the USA
• In 1944 Iceland becomes a Republic
• In the early 20th century, things start to look
  better, industrialization of the fishing industry
  started to bring wealth.
• After the ww2 Iceland receives a lot of Marshall
  aid, actually the highest per person even though
  Iceland never experienced any real damages during
  the war.
• In 1949 Iceland becomes a founding member of NATO
  and then signs a bilateral agreement with the
  United States, where the United States guaranteed
  Icelandic safety for keeping a airbase there.

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Some facts about Iceland

• The most-developed country in the world,
  according to the UN Human development index.
• The 4th richest country in the world per capita
  and the most expensive.
• Still is quite dependent on fishing industry,
  counts for about 50 of the foreign earnings even
  though around only 5 of the working population
  works in it. Like in other developed countries,
  services employ most people.
• However in recent years, aluminum smelting and
  financial services have become a big part of the
  economy.
• Iceland is predominantly Protestant with no
  history of minorities
• In the last 20 years immigration has increased a
  lot, especially since 2004.
• The population is only about 313.000 people

5
Iceland and Europe

• Iceland is a member of OECD
• Iceland joins EFTA in 1970
• Iceland has in general focused its relationship
  with the Nordic Countries, USA and Britain and
  not so much continental Europe.
• In 1994 the EEA agreement goes into a effect
• In 2001 the Schengen agreement goes into effect
  in Iceland
• Iceland has in its European dealings, mostly
  emphasized getting a good trade agreements
  regarding fish.
• Iceland has never applied for EU membership

6
The Cod Wars

• Conflict with Britain led to the so-called Cod
  Wars in 1952-1956 because of extension of Fishing
  zone from 3 to 4 nautical miles (6 to 7 km),
  1958-1961 because of extending the fishing zone
  to 12 nautical miles (22 km) in 1972-1973 because
  of extension to 50 nautical miles (93 km) and in
  1975 to 1976 because of extension to 200 nautical
  miles (370 km).
• The cod wars ended in 1976 with our complete
  victory, of course!!!

7
Why Iceland hasnt joined the EU

• Fish, Fish, Fish!!! We fought the British over
  it, and the fear now is that if we join then the
  very large idle fleet of Spain and Portugal will
  come to our waters
• Icelanders differ a bit from the other
  Scandinavian countries in that Icelanders value
  more independency (individualism). This is said
  to connect to the Viking heritage and the
  founding of the country. This might also explain
  hesitation of joining a union such as the EU.
• The current political system is based on a 4
  party system where only one party is in favor of
  EU accession (Social democrats), while the
  historically largest party in Iceland
  (center-right) is divided, the agrarian party is
  mostly against, and the socialist party is
  against
• Icelanders feel European, but Europe is over
  there, always has been far away. So historical
  and security reasons matter a lot.
• For 15 years now, Iceland has enjoyed a very high
  growth rate, much higher then EU growth rates,
  also we have always had very low unemployment
  (now just over 1). So people ask what is the
  point in joining!!

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Future events

• Iceland is pursuing a wait and see policy
  regarding membership, if Norway joins then the
  EEA agreement is pretty much over, if the UK
  takes up the EURO, then almost all our trade is
  in the EURO.
• If the EEA agreement is over then we would have
  to make a bilateral agreement with the EU, in
  which we would never get as good of a deal as
  SWISS!
• The biggest supporters of EU admission is the
  business sector, our currency fluctuates a lot,
  so a lot of people want to scrap the KRONA for
  the EURO.