Iceland: 'Eurozone benefits look less clear for smaller countries' - president

THE benefits of Eurozone membership for small countries "look less clear" in the current debt crisis, Iceland's president has claimed.

"The debate more than a year ago to apply for membership was that the global financial markets have developed in such a way that it was difficult to maintain a separate currency for a small nation," President Olafur Grimsson said in an interview yesterday.

He added: "But since then we have seen one euro country after another in serious difficulty.

Hide Ad
Hide Ad

"Most recently, what's happening in Ireland. So the advantages of having a different currency look less clear now."

The financial crisis moved Iceland to seek Eurozone membership after decades of reluctance, but Mr Grimsson appeared sceptical about the safety the European Union could provide.

"The euro is not a fail-proof formula for economic success as Greece and Ireland and other countries are now experiencing," said Mr Grimsson.

The bloc's persistent debt woes have hit its single currency, which yesterday tumbled to a two-month low versus the dollar.

All of that had curbed the willingness of people to join the euro, Mr Grimsson said.

"The public opinion polls have demonstrated very clearly in recent months that the opposition towards EU membership has grown," he said.

"People don't think it (EU membership) is crucial. Whether it could have some benefits is a different matter," he said.

Mr Grimsson said any decision to join the EU would ultimately be determined by the Icelandic people.

Hide Ad
Hide Ad

"The negotiations on fisheries, agriculture and national resources will be absolutely critical.

"What will be the attitude of Icelandic people will depend very strongly on what comes out of the negotiation process," he said.

But he said devaluation of the Icelandic crown had helped the economy.

"The recovery of the economy has happened earlier and stronger than expected two years ago because the exports sector, fishing sector, agriculture and tourism have a stronger competitive advantage," he said.