l. Fish – is Iceland better off inside or outside the CFP?
INTRODUCTION: Keep in mind that everything to do with fishing is central to public discourse in Iceland. The fishing industry was the mainstay of Iceland´s industrialization. Exports of seafood provided until fairly recently up to 80-90% of Iceland´s foreign currency earnings. Although reduced in national significance through diversification (energy-aluminium, tourism, pharmaceuticals and hig-tech services), the fishing industry remains the mainstay of our rural economy. The Cod-Wars against Great Britain (1954-75) are remembered as a continuation of our independence struggle against Denmark. The Icelandic fisheries policy, based on a strictly regulated quota system since 1984, is considered to be fairly successfull in terms of preservation of fish stocks and profitability. In comparison the CFP of the EU is generally considered to be unsustainable, inefficient and wasteful (still heavily subsidized despite recents attempts at reform).
Answers to questions:
1. Yes, Iceland would be worse off inside the CFP.
2. A possible compromise? A possible compromise would be that Iceland would be declared a specific fisheries zone. This is feasible because Iceland does not share any major fish stocks with the EU. Migratory fish stocks would be managed by multinational organizations, through negotiations, as they have been in recent years. This would mean that Iceland would retain control over her EEZ. This, in my view, is a sine qua non for successfull accession negotiations with the EU. Nonetheless the Icelandic fishing business would be open for FDI under the rules of the inner market.
3. Is fishing the key issue? The fisheries issue is decisive for successfull negotiations.
4. A regional or a national issue? In Iceland the fisheries issue is a top-priority national issue – not merely a regional one.
5. Is a workable compromise on fishing the top-priority? For the reasons cited above, the fisheries issue remains a top-priority.
ll. The euro, the euro crisis, the cases of Cyprus and Ireland.
1. Would Iceland have been better off within the EMU? The EMU was from its creation inherently and structurally flawed. Both theory and practice has confirmed that a successfull monetary union must fullfill the following basic conditions: (1) The Central Bank must have full powers to act as a lender of last resort to member-governments.(2) It must be empowered to buy publicly issued bonds from member-governments. (3) It must have a minimum of fiscal/monetary coordination.
From the beginning the EMU fullfilled none of those basic conditions. When put to the test it turned out to be a failure. Although technically deficient, the ultimate reason for this failure is politics. The German instigated austerity-recipé is a failure. It has led to economic stagnation; sovereign debt is a higher percentage of GDP than before; the financial system remains sick to the core; unemployment has exploded and is totally unacceptable; inequality is accelerating out of control. All of this is a sign of a deep failure of political leadership. For years we have watched EU-leaders react with half-measures, too little and too late. This political malaise has prolonged the EMU-financial crisis with no long-term solution in sight. As long as political impotence and economic mismanagement of this type persists, the EMU can hardly be considered an attractive venue for healthy societies.
Generally speaking, the EU-leadership has insisted that tax-payers in peripheral countries pay the debts of owners of capital, with dire consequences, undermining confidence in democratic institutions and paving the way for neo-fasist extremism.
If Iceland had been a member of the EU-EMU, and if Icelandic tax-payers would have been subjected to the same treatment as tax-payers in e.g. Ireland and Greece, the whole of eternity would not have been enough to pay back the debts piled up by owners of the Icelandic banks (more than ten times Iceland´s GDP). On the claim, that the state (i.e. tax-payers) is obliged to pay the debts of owners of capital, please consult the judgement of the EFTA-Court (January 28, 2013) on the ICESAVE dispute, which acquitted the Icelandic state from the claims presented by ESA and supported by the European Commission.
2. Can Iceland recover from the crisis with the króna? It is proven beyond doubt during the 70 years history of the Icelandic republic that the Icelandic króna is not a viable currency, if Iceland wants to maintain an open and competitive economy. Comparison between the value of the original Danish króna and the Icelandic one (starting with parity) provides a convincing evidence; and the 2008 financial Crash constitutes the ultimate proof. The alternative is either to negotiate entry into a viable monetary union with other states (which EMU is not for the time being) or, unilaterally, to adopt a strong, internationally accepted currency.
lll. Added value in joining the EU, beyond the benefits of EEA membership?
1. Is the EEA enough for Iceland? Through her EEA-membership Iceland can be considered an auxiliary EU-member (like Norway), since it enjoys all the rights operating on the inner market, as full members. This applies to the four freedoms: markets for goods, financial products, services and people. It can be argued (and often is) that this gives Iceland all the positive advantages of membership, without saddling it with the disadvantages of obligations under the common agricultural- and fisheries policies, to name but few examples of several thorny issues. Additional benefits of full membership would, potentially, consist of „soft security“ provided by membership. But since Iceland is a founding member of NATO, this can hardly be considered a primary necessity.
2. Is the EEA compatible with constitutional sovereignty? The issue of „fax-democracy“: Opponents of full EU-membership justify this infringement of sovereignity by maintaining that Iceland retains its sovereign right to reject EU-legislation (although in practice Iceland chooses not to utilize those rights).
3. Does the EEA-solution enjoy public support? The EEA-agreement is by far the biggest (many volumes of text) and most extensive international agreement which Iceland has entered into. By nature it is dynamic, meaning that it is continuously being renewed. While the general public may be mostly ignorant of its inner workings, the business community has gradually become quite familiar with it. This also applies to the academic community and the trade union movement. The argument that EEA-membership is sufficient for Iceland, is actually a major argument presented by EU-opponents, especially by those who opposed the EEA-agreement back in 1994.
lV. Bilateral, multilateral or unilateral?
1. Can Iceland get by unilaterally? As a micro-state (pop.330.000), unilateralism is not an option for Iceland. The lesson for Iceland of the Second World War, as well as of the Cold War, was that a unilateral declaration of „eternal neutrality“ was useless. Iceland learned the lesson and became a founding member of NATO (1949) and concluded a defence agreement with the USA (1951-2006). This means that the sovereignty of the unarmed nation-state of Iceland is de facto protected by a „bigger block“ – NATO.
2. Do I consider Icelandic interests to be better protected by membership of a multinational organization such as the European Union – ? Yes, I do in principle, but on condition that the European Union could put its house in order. But for the time being, it is not a very attractive proposition. The EMU is in a mess. In terms of political leadership, the EU looks increasingly disfunctional. In terms of a coordinated foreign policy (e.g. vis a vis Russia and Ukraine), it turns out to be hopelessly errant and inefficient. In terms of a common security- and foreign policy (independent of American hegemony) it seems to be weak and subservient.
V. Nordic indentity?
1. Does Iceland look to the Nordic nations rather than the European mainland? Traditionally Icelanders have considered themselves to be a part of the Nordic family of nations (the Nordic 5). Due to our tradition of the „best and the brightest“ going abroad for university studies and specialist training, the educated elite has a fairly internationalist outlook. During the Cold War, a segment of the population became increasingly Americanized. Due to the impact of neo-conservative ideology during the last two decades, the business elite became brainwashed by “Reagan-Thatcherism”, the very anti-thesis of the Nordic model, which is social-democratic in essence. Currently, in terms of politics, the right looks to America, whereas the left looks to the Nordic model, as an example and inspiration.
2. Is Norway an example for Iceland? Originally Icelanders are a mixture of Nordics and Celts. We feel an affinity to both Norway and Ireland. Iceland, like Norway, is a resource-based economy. In Norway it is oil and gas. In Iceland it is fish and geothermal energy. In both cases, we are small nations, in possession of rich natural resources, of which we are jealously possessive. In both cases, the fear of foreign exploitation of our natural resources lies at the heart of our fear of foreign domination.
3. Is national identity more important than economic motivation in justifying staying outside the EU? Since both Norway and Iceland are rich in natural resources and economic potential (both would be net contributors to the EU), economic motivation for membership tends to be weaker than the issues of independence, sovereignty and control over natural resources.
4. Did the Icesave dispute fire up nationalistic and anti-EU feelings? Yes, indeed. The claim, that the Icelandic government (tax-payers) should be made responsible for debts incurred by private banks, which was supported by the EU, was repulsive to the Icelandic public. The action by the U.K. government (Gordon Brown and Alister Darling) to apply the law against terrorism, not only to the Icelandic banks, but to the Icelandic Central Bank and the Icelandic government, caused outrage in Iceland. The repeated attempts by the then left-wing government of Iceland to negotiate the Icesave dispute with the British and the Dutch governments, accepting the Icelandic government´s obligation to pay, was overwhelmingly rejected by Icelandic voters, when twice put to a referendum. The EFTA-Court´s Judgment (Case E-16/11, Jan.28, 2013) acquitting the Icelandic state of any such obligation, caused a national euphoria in Iceland. It played a major part in bringing down the left-wing government and bringing the right-wing parties, which were largely responsible for the crash, back into power.
1. Is a whaling ban an emotional issue strengthening anti-EU feelings? Yes, especially in the villages along the coast. Why? The whaling ban is taken as an example of an unjustified meddling in internal affairs and as an example of contemptible hypocrisy, on behalf of industrial nations, which are largely responsible for polluting the environment, but trying to gain green credits, without having to sacrifice anything. Scientific research proves that no whaling stocks are endangered in Icelandic waters. The whaling ban is therefore both unscientific and utterly hypocritical. It is a minor issue in terms of economic interests, but a major example of a despicable double moral.
* Other factors explaining public resistance to joining the EU:
- Natural resources
- Agricultural protectionism
- A small community´s inherent dislike of bureaucracy
- The democratic deficit
- Big countries´ domination – small countries´ lack of influence
*Rank of Issues in terms of importance in opposing EU-membership:
- Control of natural resources
- Agricultural protectionism
- Antipathy towards bureaucracy
- Deficient democracy
- Lack of influence in a mega-organization