Iceland government falls

[Jan Klimkowski]

A new British government.

The same abuse of anti-terror laws and the same obscenely punitive punishment for daring to challenge the looting of global market capitalism:

UK may try to stop Iceland joining EU over bank collapse refund

Iceland put on fast-track to join the EU but acrimony lingers over £2.3bn owed from Icesave collapse

Iceland was put on a fast track to join the European Union today, but the Cameron government served notice that it could block the country's membership unless it settled the £2.3bn Britain says it is owed as a result of the country's financial collapse two years ago.

European government chiefs at a Brussels summit decided that "accession negotiations should be opened" with Iceland. At British and Dutch insistence, however, the summit said that Iceland would have to address "existing obligations such as those identified by the European free trade area surveillance authority", a reference to the fallout from the collapse of Icesave in 2008 that left 400,000 depositors in Britain and the Netherlands fearing for their savings.

The Icesave dispute generated acrimonious negotiations, with the terms for reimbursing the British and Dutch rejected first by Iceland's president and then by the Icelandic public in a referendum.

Earlier this week, William Hague, the foreign secretary, made it plain that Britain could veto membership unless the dispute was settled. "Iceland will have to recognise its obligations," he said. "We won't block [opening negotiations], but we will want it clear at the start that Iceland meets its financial and legal obligations."

"We've taken note of that," Stefan Haukur Johannesson, Iceland's chief negotiator with Brussels, told the Guardian. "It's a contentious issue between our three countries. But we don't see it as linked with the accession process."

In October 2008, following the collapse of Landsbanki, Icesave's parent, the Brown government sparked outrage in Iceland by invoking anti-terrorism laws to freeze Icelandic assets in Britain. The government in Reykjavik denounced the UK move as "an absurd decision".

Johannesson said that it was "self-evident that we will live up to our obligations" but insisted there could be no direct linkage between the financial row and the European negotiations.

Iceland is otherwise likely to have a relatively smooth passage through the negotiations because it is in effect already part of the European single market.

The biggest issue will be fisheries where Iceland, a tiny country, is a superpower. It would instantly become the EU's biggest fishing nation, overtaking Spain. It also practises highly successful and pioneering fisheries policies whereas the EU's common fisheries policy is widely discredited as ruinous.

The biggest problem for Iceland joining may ultimately lie in popular opposition to pooling its sovereignty. Opinion polls recently have shown growing reluctance to join the EU. At the height of the financial crash two years ago, Iceland's attitude underwent a sea-change because its currency, the krona, was virtually wiped out and the adoption of the euro became attractive.

http://www.guardian.co.uk/business/2010/...iceland-eu