Iceland Freezes EU Plans as New Government Shuns Euro Crisis
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Iceland Freezes EU Plans as New Government Shuns Euro Crisis

Iceland Freezes EU Plans as New Government Shuns Euro Crisis
Map of Iceland with EU flag

Map of Iceland with EU flag (Photo credit: Wikipedia)

By Omar R. Valdimarsson – May 22, 2013

Iceland’s new government is turning its back on the European Union and will shelve accession talks that started in 2010 as the nation seeks to protect its economic recovery from the debt crisis.

Sigmundur David Gunnlaugsson, who will take over as prime minister this week, has decided that a January decision to freeze EU membership talks will be extended indefinitely, his political adviser Johannes Thor Skulason said in a phone interview today.

  Incoming Prime Minister Sigmundur David Gunnlaugsson

Sigmundur David Gunnlaugsson, seen here right, who will take over as prime minister this week, has decided that a January decision to freeze EU membership talks will be extended indefinitely, his political adviser Johannes Thor Skulason said. Photographer: Halldor Kolbeins/AFP via Getty Images

“Later in the term there will be a referendum on whether Iceland should continue the talks, although no date has been decided,” Skulason said.

The new coalition of Progressive and Independence parties, which ousted the Social Democrat-led government of Prime Minister Johanna Sigurdardottir in elections last month, is due to unveil its economic program today. The decision by Gunnlaugsson, 38, to shelve EU talks means Iceland won’t target euro membership even after capital controls are lifted.

The appeal the EU once held to nations seeking economic stability and access to free trade is crumbling as the region fails to emerge from its debt crisis. The U.K. is now openly questioning its allegiance with the EU while existing members like Denmark have distanced themselves from the goal of euro adoption to protect their economies. Iceland, which in 2008 became the first nation to succumb to the global financial crisis, now enjoys faster economic growth than the EU average.

Continue reading at Iceland Freezes EU Plans as New Government Shuns Euro Crisis – Bloomberg.

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