Magazine article Europe-East

Eu/iceland : Trade Unions Urge Reykjavik to Apply for Eu Membership

Magazine article Europe-East

Eu/iceland : Trade Unions Urge Reykjavik to Apply for Eu Membership

Article excerpt

The financial turmoil has prompted renewed calls from Icelandic trade unions for the country to join the EU and adopt the euro. Faced with a deteriorating situation in the banking sector, the collapsing value of the Icelandic currency and rampant inflation, the country's trade unions said in a statement that Iceland "should aim for EU membership and the adoption of the euro as soon as possible". Achieving financial stability would not be possible with the Icelandic krona, the trade unions argue. The currency has fallen 20% against the euro in the last month.

The call came amid emergency cross-sector consultations held by the government over the weekend in Reykjavik on ways to fight the current banking crisis. The government already nationalised Iceland's third largest bank, Glitnir, last week. But according to experts, Iceland's other two big banks, Kaupthing and Landsbanki, are also in trouble. The government, which according to analysts is not able to afford to bail out its other banks, asked the trade unions to repatriate a sizeable portion of their foreign-invested pension funds to help stabilise Iceland's financial market. According to Icelandic media reports, the trade unions' Pension Fund Association (PFA) agreed to repatriate some 200 billion krona (13 billion) from overseas funds back into Icelandic banks.

According to EU Enlargement Commissioner Olli Rehn, "the euro can only be adopted through European Union membership". …

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