The European Union will support the Icelandic crown when currency restrictions are lifted during the accession process.
Eyjan reports that Minister of Economics and Business Árni Páll Árnason met with European Commissioner for Economic and Financial Affairs Olli Rehn yesterday, discussing the economic implications of Iceland being brought into the EU, now that accession talks are at the beginning stage.
“Iceland gets no expedited path into the euro area and needs to abide the same regulations as other countries in order to adopt the euro,” Rehn said with Eyjan. “But we assume that the stability of the crown will be important when the currency restrictions are lifted, and the EU is ready to support it in a technical manner. We say in Finland that a good plan is half the victory, and we will take part in such a plan with Icelandic authorities.”
Rehn said the EU has been following Iceland’s economic progress from the bank crash until present day, and said that many positive signs have come forth, such as a significant reduction of interest rates and trade balancing.
He also considered it positive that Iceland has reached an agreement with Britain and Holland over Icesave, and was pleased that the agreement has a parliamentary majority. Vísir reports that the British support Iceland joining the EU as well.
While it has not been decided in what way the EU will support the crown, Árni Páll remains optimistic.
“This is an important turning point,” he told Eyjan in part. “We have sought after support for the value of the crown, which is important in establishing confidence on the international market. Cooperation such as the sort Rehn is offering leads to the possible adoption of the euro in the future.”
The EU has said that Iceland would not be able to adopt the euro without accession, but part of the transition process will involve ensuring the economy remains stable as the country transitions from one currency to the next.