Euro Update: Iceland – Back to where they were before?

Remember the Icelandic financial crisis? The times when the same media, which have now heavily criticised the temporary imposition of capital controls in Cyprus, applauded Britain for using its ant-terror laws to freeze Icelandic bank accounts? In the wake of Iceland’s economic and financial meltdown, voters in Iceland had ushered in a centre-left government with a mandate to clean up the mess and to turn to the EU to firmly anchor Iceland in Europe. With the centre-left having done its unpopular duty and the economy rebounding, voters now went back to where they had been before. The centre-right squarely won the Icelandic elections. One of the election promises is to stop the negotiations with Brussels about joining the EU. For Europe, this won’t make much of a difference. For Iceland, let’s hope that the brave small island will never be in a position again where it could need the protective umbrella of Brussels against the whims of individual European countries. If Iceland had been an EU member when its crisis broke, it would have been much more difficult for other members to apply such unusual and unfair treatment to Iceland. But forsaking that extra legal protection is now the Vikings’ choice.

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