Ávarp viðskiptaráðherra Gylfa Magnússonar á morgunverðarfundi hjá Viðskiptaráði Íslands þann 2. apríl. 2009
Good Morning
Ladies and Gentlemen
I would like to begin by thanking the bilateral chambers; that is the - German – Danish- British-French-Finnish-Swedish- Italian – and Spanish Chamber of Commerce for hosting this conference.
As a European I am very pleased to be invited to open this conference, because I think we are about to enter into an exceptionally interesting debate about European co-operation. In fact we see an example of this the type of co-operation we see at this conference. For as far as I am aware the above mentioned chambers come together under a single managing director here in Iceland. This, to my mind, shows how well all of these countries can work together.
Although I am currently serving as the Minister for Business Affairs, I am an economist by training so I am very interested in the debate that is taking place here today from my Ministerial post as well as from a more Academic perspective.
I think that the kind of discussion we see here is one of the most important debates facing Icelandic society at the moment. I would like to commend the bilateral European chambers for opening this crucial debate.
It is obviously important to hear both sides of the argument. Many Icelanders are, perhaps justifiably, fearful of the EUs common fisheries policy and/or see membership to the European Union as a loss of sovereignty.
A common fisheries policy could of course significantly affect one of Iceland’s main exports. It may be a side issue to many European countries but here it is of primary concern.
One also hears the argument that as a small country we will have such a small voice within the European Union. I find this a rather interesting argument for at the moment have we practically have no voice. Through our trade with the EU and through the EEA agreement we are essentially tied to the EU but we have no real voice as a member
It is also important to remember all the potential benefits that come with EU membership. Not only would membership provide Iceland with an opportunity to cooperate on many levels with its fellow European nations. Membership would undoubtedly bring more economic stability to Iceland.
It is particularly noteworthy that EU membership with the subsequent adoption of the Euro would allow us to become part of a stable currency environment. This is a subject that beats very close to my economist heart.
As most people know by now, Iceland has the world’s smallest currency. Consequently, it wasn´t only the countries financial system that collapsed last autumn, the nation´s currency collapsed as well. And although for the moment it is good to have a weak currency, as it helps our export industries – a small highly volatile currency propped up by high interest rates and currency controls is not a long term solution for the country.
I have looked and evaluated various currency options for Iceland and evaluated them based on variables such as cost, interest rates, trade, stability, credibility and flexibility. My conclusion is that as far as the currency is concerned joining the European Union and adopting the Euro is by far the best option for Iceland. Although we lose out a bit as far as flexibility we stand to gain so much more through stability and lower interest rates.
I hope today´s debate goes well and that we Icelanders can learn from the experience of our European colleagues and friends.
As a European it is my sincere wish that we can reach a favourable agreement on the common fisheries policy so that the Icelandic nation will vote to join the EU. For I think by becoming a member we will not lose any of our sovereignty rather I think that it will help us ensure that we remain an independent country that has good friends and allies in Europe and return us as soon as possible to a healthy and vibrant economy.