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Iceland Better Off Without EU Membership - Finance Minister
Date 05/05/2011 14:36  Author webmaster  Hits 1635  Language Global
05 MAY 2011

• Iceland finance minister says country better off out of the EU
• Finance minister says EU membership could damage fishing industry
• Minister expects euro zone to survive current challenges
• Says Icelandic krona has "served the country well"
• Icesave No vote will not delay return to capital markets
• "Very unlikely" that UK, Netherlands would veto Iceland EU entry.


By Charles Duxbury | DOW JONES NEWSWIRES

 Iceland would be better off staying out of the European Union because joining could damage the Nordic state's vital fishing industry, among other things, the country's finance minister told Dow Jones Newswires.

Steingrimur Sigfusson added, though, that he sees the euro zone shaking off its current debt problems.

"Iceland is probably better off with other forms of agreement and connections with the EU than full membership," Sigfusson said in an interview. "I am still very skeptical when it comes to the overall benefits of membership."

Iceland has "very special interests" when it comes to fisheries, agriculture and "many other things," the minister said.

The North Atlantic state is heavily reliant on its fishing industry and some there fear that joining the EU would force Iceland to reduce its catch, in line with the bloc's rules.

Turning to the state of the euro zone, Sigfusson said he feels the currency union will survive the current challenges it faces after Portugal's debts forced it into becoming the third member of the euro area to request a bailout.

"I rather expect they will find solutions to the problems," Sigfusson said. "Other big economies have a keen interest in Europe being successful and it would obviously be negative for Japan and the U.S. if Europe is not successful. I rather expect they would find support if needed from elsewhere."

But the minister repeated his view that Iceland would be better off keeping the Icelandic krona, which has "served the country well."

"Devaluation is never without a cost but it definitely has created a good competitive advantage for our exports and it is supporting the real economy through the crisis," he said.

The krona sank like a stone during the financial crisis and its plunge has been credited with helping the economy recover by making Icelandic goods cheaper on the international market.

Sigfusson said that opposition to joining the EU was "strong" among the population and this was reflected in a recent poll for the business paper Vidskiptabladid, which showed 55.7% opposing accession.

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