Thursday

27th Jan 2022

Iceland unions push government to join EU

  • Iceland's government needs trade union pension cash to put the economy back on track (Photo: Johannes Jansson/norden.org)

Iceland's trade unions want the country to join the European Union in return for help in an economic rescue plan, as the island state's government holds emergency talks to shore up its teetering economy.

The trade unions' Pension Fund Association (PFA) has told the government it is ready to repatriate some 200 billion krona (€13 billion) from overseas funds back into Icelandic banks, according to Icelandic public radio.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

But the quid pro quo demanded by the unions is that the government apply to join the European Union and adopt the euro, according to reports in the Morgunbladid newspaper.

A PFA memorandum argues the country's deepening financial crisis cannot be solved so long as Iceland holds on to the volatile krona, which has fallen 20 percent against the euro in the last month.

"Therefore we should aim for EU membership and the adoption of the euro as soon as possible," the Times of London quotes the document as saying.

Membership in the bloc has long been opposed on the small North Atlantic island - whose population numbers only 320,000 - largely due to concerns over loss of control over fishing grounds under the EU's Common Fisheries Policy.

In 1994 Iceland signed the European Economic Area (EEA) agreement with the European Union, allowing it to participate in the European Single Market without having to join the EU.

On 23 September, Iceland's European Committee, a body of government, trade union and industry representatives, met with EU officials to find out whether there were any legal blocks to Iceland adopting the euro unilaterally without joining the bloc.

But enlargement commissioner Olli Rehn said "the euro can only be adopted through European Union membership" after he met with the delegation, the Frettabladid newspaper reported.

Mr Rehn added that if Iceland were to apply for membership, negotiations would take less than a year to be completed.

In a separate move, the Icelandic government is expected on Monday (6 October) to announce an injection worth several billion euros into the country's central bank.

Interview

Does North Macedonia really exist?

Its language and history give North Macedonia its identity for president Stevo Pendarovski, but, for Bulgaria, neither of them are real, in a dispute holding up EU enlargement.

Spain to recognise Kosovo if it gets Serbia deal

Spain would be prepared to recognise Kosovo if it clinched a deal with Serbia, Madrid has said, in the first positive signal of its kind since EU-brokered talks resumed.

Kosovo to restart EU/US-led Serbia talks

Restarting talks on Serbia relations will be the new Kosovo prime minister's top priority, he said, but will the EU or the US lead the process?

Opinion

Montenegro's membership can inspire the European Dream

Today (15 December) I come to Brussels with a simple purpose: to present the credentials of my country, Montenegro, to become the next member state of the European Union, writes prime minister Zdravko Krivokapic.

Interview

Does North Macedonia really exist?

Its language and history give North Macedonia its identity for president Stevo Pendarovski, but, for Bulgaria, neither of them are real, in a dispute holding up EU enlargement.

Join EUobserver

Support quality EU news

Join us