Jón Baldvin með fyrirlestur í Finnlandi

Jón Baldvin Hannibalsson, fyrrverandi utanríkisráðherra,  flutti nýlega áhugavert erindi í Finnlandi á vegum stofnunar sem nefnist ,,The Foundation for European Progressive Studies"  Jón Baldvin segir meðal annars; ,,The widespread resentment felt by the general public in Iceland and the sense of injustice at being forced by the EU, through the IMF, to accept the moral obligation – if not a legal one – to pay the enormous debt left behind by irresponsible venture-capitalists, has poisoned the atmosphere surrounding the domestic debate, concerning Iceland’s application for membership in the EU.  

Immediately after the crash a strong majority among the public was convinced that EU membership and the prospect of adopting the euro in the near future, was part of the long-term solution to Iceland’s problems.  Now, when the IMF has delayed the crucial review of their rescue programme for Iceland for more than half a year, since the British and Dutch governments have made it conditional for Iceland to accept responsibility for the bankruptcy of private banks, polls indicate that public support for seeking EU membership is rapidly vaining."

Hann segir einnig;
,,In this context it is interesting to compare the fates of the sister islands of Iceland and Ireland.  Both island economies had been enjoying sustained periods of rapid economic growth.  In both countries economic growth had been fuelled by a steady influx of foreign capital investments.  In both countries the real estate boom spiralled out of control and turned into a bubble.  In both countries the standard of living and the level of consumption exploded.  Both economies were feeling the strain of overheating.  

But this is where the comparison ends.  Cynics are saying that the difference between Iceland and Ireland was one letter and one week.  The big difference is that Ireland is a member of the European Union and a partner in the monetary union, using the euro as a national currency.  Iceland, on the other hand, has been experimenting with its krona within the smallest currency area of the world, in an environment of free flow of capital, under a regime of wide open financial open markets.  

This has turned out to be a world of difference.  Iceland has suffered a twin-crisis: a collapse of the financial system and a massive devaluation of the krona.  The currency crisis has magnified Iceland’s foreign debt and caused serial bankruptcies of both companies and households.  But Iceland’s weak currency – itself the cause of so much misery – evokes the prospect of a quicker recovery, due to an improved competitive position.  This raises the question of what price to pay for long term stability?   For some the euro may look like a salvation.  After the crash, maintaining our own weak currency, Iceland may entertain the prospect of inflating itself out of debt.  But at what price, in terms of the stability required for long-term growth?"

 

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