(150) Iceland Hit severely by the economic crisis that resulted in the collapse of its currency and banking system, the smallest of the Scandinavian countries applied for EU membership in July 2009. Iceland already has strong links with the EU. It belongs to the Schengen Area, which facilitates travel and work between signatory countries. It is also a member of the European Economic Area (EEA), which extends the EU’s Single Market to Iceland as well as to Norway and Liechtenstein. From this perspective, integration into the EU would seem a relatively straightforward process, as the country has already implemented a significant part of the acquis communautaire. Therefore, in February 2010, the Commission recommended that negotiations ought to start, and the country was given official candidate status in June 2010. Relations between Iceland and some member states, however, are undermined by developments emanating from the economic crisis of 2008 and 2009. Unfortunately for Iceland, Landsbanki, one of its main banks that offered saving accounts to UK and Dutch customers, had collapsed during the credit crunch. With the Icelandic government unable to guarantee deposits, the British and Dutch governments were forced to step in to the tune of around 4 billion Euros. Both want to reclaim the money, but a referendum held in February 2010 rejected a repayment deal, leaving the Icelandic government no option but to walk out on resettlement talks. Unless this issue is solved, it seems unlikely that the integration of Iceland will proceed smoothly.
Posted on: Wed, 29 Oct 2014 04:07:21 +0000