The membership application for Iceland to join the European Union has caught the attention of many around the world; especially neighboring nations such as Denmark. Mixed opinions formulate all over the European Union as well as in Iceland about Iceland’s membership application. Today, in Danish newspaper Jyllands-Posten, a political cartoon was made illustrating Iceland’s recent news about intentions about joining the EU.
The energetic demeanour of Icelandic Prime Minister Johanna Sigurdardottir in regards to membership in the EU was drawn today in the political cartoons in Jullands-Posten. The cartoon might also illustrate how most of the country does not want to join the EU but Johanna is still pulling and dragging the country to join.
(Photo/Jyllands-Post)
“I think the current system = print money and issue as debt, then burn it, give it to the bankers that every one knows will waste it on bonuses, jets whatever, actually the same bankers that already ruined their banks, its just not working”
I agree, but suspect that the solution is new regulations and better enforcement of them, rather than changing from fiat money to representative money.
“In 2007, for example, UK land prices went up around 20%, whereas American land prices went down. So, I guess you mean the UK pound should have appreciated 20% against the US dollar in 2007?”
I think the current system = print money and issue as debt, then burn it, give it to the bankers that every one knows will waste it on bonuses, jets whatever, actually the same bankers that already ruined their banks, its just not working,
it does not take a genius to see how this is going to end,
i think the depression is just starting,
http://www.youtube.com/watch?v=w84EiCt0Lqk&feature=fvw
“It does not have to be gold, just something of real value, like land for example”
In 2007, for example, UK land prices went up around 20%, whereas American land prices went down. So, I guess you mean the UK pound should have appreciated 20% against the US dollar in 2007?
“There isn’t enough gold in the world ($5tn) to back even the US dollars currently in circulation ($8tn)”
Thats true, i don’t have a magical solution to this problem,
this video shows you the current status in USA
http://www.youtube.com/watch?v=R2Npvl3fUks&feature=related
It does not have to be gold, just something of real value, like land for example.
USA consume far more than they produce and have done that for a while now collecting a mountain of debt,
they are even borrowing from the Communists in China now,
it has been coming clear to people that you cant borrow and spend infinitely, at some point your going to go bust, printing money to “stimulate” the economy creates the illusion that everything is ok, but thats not going to work for ever.
“when this pile of sh*t we call western economics falls apart, and it will, we will probably go back to the old fashion type of money, backed with gold, not debt”
There isn’t enough gold in the world ($5tn) to back even the US dollars currently in circulation ($8tn), let alone all the other currencies currently in circulation in the world. Although central banks could hype up gold’s value several-fold by buying up much of it. Seems a sensible plan ;-)
“Actually Ebay is a market in “this world” dealing with real money payed by people who earned it.
when the UK gov runs into trouble some bloke sits down, thinks of a good number and hammers it on the keyboard along with a bunch of zeros and everything looks ok again to in the virtual economy
where money isnt really real, but as long as every one believes it is the ball keeps rolling, getting bigger and heavier every day,
when this pile of sh*t we call western economics falls apart, and it will, we will probably go back to the old fashion type of money, backed with gold,
not debt.
Hi Fisy,
I was merely making the point that in my opinion the article by Prittchard is of poor quality.
I fully agree with your points on the advantages of having your own currency, which enables you to make your own monitary policy. In fact, I used to have such a believe myself before the euro was introduced.
However, there is one important aspect: having a small national currency makes you VERY vulnerable to speculatory attacks from foreign parties.
In fact, even a big currency as the GBP suffered from this: speculation form ONE person (George Soros) had serious consequences:
http://www.timesonline.co.uk/tol/news/uk/article5989163.ece
In fact, even when we still had our own currency this monetary freedom was fairly limited: basically, even though we are a quite developed and large economy , Netherlands were just a branch of big Germany: if the german Bundesbank raised its interest the dutch national bank had to follow. That was a fact of life and it worked out quite well. I even think that bigger economies like France or the UK also depend on Germany very much.
But I agree that there is a danger: big countries might dictate an economic policy that could be unfavourable to smaller countries.
2 aspects should be kept in mind:
-this danger should be weighed against the risks of having your own currency, especially whne this currency is very small
-so far the european central bank in Frankfurt has shown that it is a quite independent institution which can resist pressure from big members. In fact, the european central bank’s regulations have been modelled on the german Bundesbank whose independence is strongly regulated and defended (something which has been highly effective in post-war Germany)
It is likely that in countries like Spain and Ireland the crisis would have been much worse than it is now if they still would have had their own currency.
I do not understand the following point you make:
If we were EU member state it would be even worst situation because we would have the not for us interest rates, restrictions on free trade with rest of world that EU forces, and also all thse costs of implementing from 6-7% of EU regulation we have now up to 100% that apply to us. )
As a member of the EU you are perfectly free to conduct bussiness with the world outside of the EU. For instance, I do not know any restrictions on trade Netherlands are facing when we want to do bussiness with the USA , Indonesia, Surinam or Japan.
The other way around it is a different story: countries which are not in EFTA face numerous barriers when dealing with the EU.
As for the cost of implementing EU regulations: this should be discounted against subventions Iceland would receive for fishing and agriculture as well as possibilities for economic growth.
NIels, you notice I agree before that it is reasonable to investigate other currency and that taking EURO longer term is not a bad idea ( not more so than taking Norweigan Crown or even USD ).
But not for us to become an EU member state.
( We can watch an application of the Faroe Islands to get the EUR without being an EU member state with interest:
https://www.icenews.is/index.php/2009/08/06/euro-wanted-as-currency-in-faroe-islands/ )
Having control of your own currency gives you the ability to set it interest rates and money supply based on your local conditions. It would have been a far different kind of bad situation we would be in if we had EURO now.
Even if our banks could have survived we would have not had unlimited funds to borrow from European Central bank and would have been treated as Spanish banks were in this regard.
We would still have the IceSave debt still in GBP and EUR, but we would not have export industries to pay for it because of EU member ship.
( If we were EU member state it would be even worst situation because we would have the not for us interest rates, restrictions on free trade with rest of world that EU forces, and also all thse costs of implementing from 6-7% of EU regulation we have now up to 100% that apply to us. )
As poster said there in article comments this is the issue of EUR and fundemental reason why there is skepticism of its long term survival with one EUR to rule them all:
“So for example it allows Spain to make monetary decisions that best suit Spain, rather than suffer ECB monetary decisions that best suit … well, certainly not Spain.
Since taking on the euro, Spain has had a credit boom because euro interest rates were set too low (to help Germany out of recession) followed by a bust triggered by interest rates being set too high last year.
The last 7 years have been an absolute disaster for Spain: unemployment is near 20%, the Spanish credit rating has been downgraded, and the housing market has been destroyed.
I’m not sure what planet you live on, but I live in Madrid and I can assure you that people here cannot see what benefits the euro has brought them at all. Just because Spain benefited from joining the EU back in 1986, does not mean Spain has benefited from joining the euro in 2002.”
We can see situation coming where Euro system becomes again that each memberstate does not only issue its own coins and papermoney but that each of its central banks ( and they still do exist ) sets the interest rates for each memberstate.
Can imagine that this is far preferable politicially to the EU burecrats as whole instead of admitting that Euro with one set of interest rates is a failure.
>An interesting thought experiment: How much would Iceland cost to buy? Anyone got a realistic valuation?
Whatever the market will bear, namely about £10m if bidding had peaked when it was pulled from eBay.
“Maybe the EU or USA could just print a small fortune of “money” and “buy” Iceland”
An interesting thought experiment: How much would Iceland cost to buy? Anyone got a realistic valuation?
this article already has been discussed on this forum:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5912682/Icelands-krona-proves-the-magic-wand-as-Europe-ails.html
And I must say that I find it completely sub-standard:” Iceland is doing well because the country is cheap to foreign tourists after the financial collapse. “, right.
Basically the collapse of the krona is presented as a success story vs the stable currencies of visiting tourists (to whom Iceland has become ‘cheap’ by now): There is no logic in this.
Fact of the matter: the krona is practically dead and needs protective measures: the icelandic monetary market has been sealed off completely by currency restrictions. Without these supportive measures the krona would fall down completely.
Another fact: euro-countries like Germany, Belgium, Austria, Spain and NL have lower prices and more tourists (also from Japan) than non-euro countries like Iceland or the UK.
“The aluminium melters are working at full capacity”….right: in about one year the world market price of aluminium was practically halved:
http://www2.glitnir.is/English/Markets/Research/?BirtaGrein=623476
the argumentation in this article reminds me of Berlusconi who, after the earthquake in Aquila told that “It was a great thing for the people who lost their houses because they will be on a camping holiday, during the next months.”
“Yes it has been hard but taking the Euro is not the solution to everything, and of course definately joining the EU is not the solution.”
And if we would join EU we would not get the euro until the economy is back to normal, and if we ratify the icesave deal as it is that will probably never happen, why waste time on this European Union, its as good as dead anyway, they buy a little more time is if the manage to bully the Irish to back up the EU constitution and Icelanders to join.
Maybe the EU or USA could just print a small fortune of “money” and “buy” Iceland,
a few keystrokes and voila, billions and trillions of money everyone believes is real, they could end up buying the whole world, collecting debt in the process everyone knows no one ever intends to pay.
Jim said:
https://www.icenews.is/index.php/2009/07/21/denmark-newspaper-jyllands-posten-published-joke-about-iceland-eu-application/comment-page-1/#comment-86461
>4. Thank God the UK was not in the Eurozone, otherwise points 1 and 2 would not have been possible and our recession would therefore have been deeper and much much longer.
Right, and it is the same for us with the Crown :
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5912682/Icelands-krona-proves-the-magic-wand-as-Europe-ails.html
https://www.icenews.is/index.php/2009/07/29/eurosceptic-telegraph-still-praising-iceland/
Yes it has been hard but taking the Euro is not the solution to everything, and of course definately joining the EU is not the solution.
Its an accurate cartoon.
The way it is when EU question comes up..
Polls asking if people want to start membership talks ( aðildarviðræður ) with the EU have almost always resulted in a majority in favour.
Polls asking if people want to apply for membership (umsókn um aðild) of the EU have almost always resulted in a majority against.
And that is no different now despite misleading publishing of polls for start membership talks as if that gives support for EU application for member ship when clearly that is a different question.
Polls asking if people wanted to actually join the EU have usually resulted in a solid 50 % against except now with latest Gallup poll it show that 48.5 percent are opposed to EU membership and 34.7 percent are in favour with 16.7 percent not commited one way or other.
http://www.andriki.is/default.asp?art=04082009
This is 10% swing toward No to EU membership since May and 4% swing away from Yes.
Why?
Because Social Democrat have given no convincing reason why we should go into EU instead just forcing it through with traitor to his supporters Steingrímur J in Left-Green backing them even though he claims he is against it !!
@Peter-London
“Hahaha, I’m sorry would the ‘Gentleman’ prefer is unemployment benefit in Euro’s or his wage in pesetas?”
The gentleman prefer to work, a job, and receiving a wage in Pesetas or Euro; the PIRATE prefer to enjoy the EU benefits and playing dirty with a devaluated currency, the Pound! What is your pride? A devaluated Pound? HAHAHA Where is the British pride? HAHAHA! EU -> Euro; you do not like the Euro, get out of the EU! The EU does not need pirates!!
“You embolism my point; you connect your currency with your machismo, but the Euro is strong and the Spanish richer becuase of Germany’s input to the Euro. Its unsuitable to the Spanish economy but it boosts your ego, so good luck to you.”
Yes, everybody is richer if Germany is part of the Euro, until your cute, small, arrogant and out of date island is richer if Germany is part of the Euro. And, YES!, Germany makes great to each country, and, the Euro countries make GREATER Germany: this is your pain teeth!!! Really, I am so sorry!!!
“True, but the bubble has been fired up by the Euro; stationer currency and lower interest rates caused an even bigger bubble than in the UK. The bigger they are the harder they fall.
The Euro has introduced even more instability.”
The bubble has not been fired up by the Euro but some minds placing the lowest interest rates. I remember to you: 3 years, interest rates at 2%, ECB. Also, ECB could place 4%. But, some minds were interested: an housing bubble. Equally some minds were interested in an Euro to 75 icelandic kronur, and, on those days, policy rate at 11-13%!!! Could this thing be understood? Yes, we could understand the game of some rogues!
And, the Euro has not introduced more instability: I do not have a currency with instability; my country does not have large banks with instability. And you? And yours?
/////////////////////
People is not responsible of the stupidities of the politics, inside; People is not responsible of the decision of some terrible minds, outside!!
Congratulations to Francesco and Jamie A!
“You embolism my point”
LOL :-)
Jorge ; SPAIN said:
“What so embarrassing words:
“Having a strong currency is great if you don’t want to sell anything and intend to live off un-employment benefit – like the Spanish and Irish.”
Such comments are unworthy of a gentleman; such words are worthy only of a Pharaoh, or a pirate! You hate the Euro because you would love the Euro! ”
Hahaha, I’m sorry would the ‘Gentleman’ prefer is unemployment benefit in Euro’s or his wage in pesetas?
You embolism my point; you connect your currency with your machismo, but the Euro is strong and the Spanish richer becuase of Germany’s input to the Euro. Its unsuitable to the Spanish economy but it boosts your ego, so good luck to you.
“Spanish and Irish ‘crashes’ are not due to the Euro but to housing bubble”
True, but the bubble has been fired up by the Euro; stationer currency and lower interest rates caused an even bigger bubble than in the UK. The bigger they are the harder they fall.
The Euro has introduced even more instability.
Bye bye holidays. Hello people! Hello Iceland!
@Jim
“Polls in the UK consistently reveal that over 80% of the population is against adopting the euro and so, no, we don’t regret it! At the start of the recession it provided the UK with the flexibility to lower interest rates by 5% and temporarily devalue the currency by a third. Every Eurozone country would like the flexibility to set its own interest rates to match its own particular circumstances and position in the economic cycle, rather than being restricted to follow the Euroherd. I feel sorry for the Eurozone countries, I really do.”
“Note that even the interest rate cut and devaluation combined were not sufficient. Further economic stimuli (VAT reduction, quantitative easing, etc) were also required.”
“Thank God the UK was not in the Eurozone, otherwise points 1 and 2 would not have been possible and our recession would therefore have been deeper and much much longer.”
Even, interest cut and devaluation combined have not been sufficient. Futher economic ideas have been necessary! Bank of England, policy rate at 0,5%, And? NOTHING! Devaluation of the Pound 48-50% (2.9DM to GBP -> 1.96DM to GBP, December 2008, Christmas sale), And? NOTHING! USA would need an interest rate at -5,00%, and, this is not possible, it is not possible negative interest rate, only 0,00%-0,25%. Similar UK and other countries. This is not the question. Question is that people cannot buy a car every year, people cannot buy a computer every year, people cannot have one or two beautiful trips every year! People cannot spend what they do not have; people cannot spend the money of the banks: people must use only its own money! Bye bye credit bubble! If people does not have money to buy new computers, new cars, new iphones, new houses, … where are you going to sale these things? Dark years, or create a new bubble! Some ‘men’ are thinking!
Really, do you feel sorry for the Eurozone countries? Do you REALLY feel sorry for Germany, Netherlands, Belgium, Austria, Denmark, Finland, France, …? Then, let me say: you are a stupid guy!
Your recession had been deeper and much longer if British Government had not put on the table POUNDS + POUNDS + POUNDS + POUNDS + … : little about policy rate and devaluation! Question is not sales (A); question is GROWN (A+). Where to export? People does not have money! People did have credit! People did not have so much REAL money but cards! Money of the banks!
@Peter-London
“The UK will not take up the Euro, you are kidding yourself if you think they regret not having the Euro.
Having the Euro would have meant a crash like Ireland and Spain are going to get; long and very very severe.
Britain devalued its currency and what a great benefit that has been, Euro customers are flocking to the UK to buy British goods. In Ireland customers are driving to Northern Ireland to do all their shopping. Having a strong currency is great if you don’t want to sell anything and intend to live off un-employment benefit – like the Spanish and Irish.”
Spanish and Irish ‘crashes’ are not due to the Euro but to housing bubble: Ireland has never been richer; Spain has never been richer in the last four centuries. The Euro has been a blessing: price stability -> low interest rate (we have enjoyed same interest rate … Germany, Netherland, Austria) And this is well known per Spaniards, Portuguese, Greeks, Italians, Finns and Irish. Even French and ‘Danish’! And, your country, UK, have enjoyed as weel! Why? Because the Pound together with Euro or Dollar is NOTHING!
About un-employment: Yes!!! Spain and Ireland live of un-employment benefits!!! my company lives of un-employment benefits, companies of my friends are living of un-employment benefits and, our workers live of un-employment benefits!!! JAJAJA !!! Nevertheless, I would say: today, your country lives and has been living of Europe and the Euro; and, your country have lived of Europe and the World! History!
I do understand your envy to the Irish, and I do understand your envy to the Continent: when the ’empire’ stops being Pharaoh of slaves, the slaves become rich and free men! And Ireland, has become a richer country, and this is difficult to assimilate – better, to digest -: the slave is a richer man now than his cruel Pharaoh! This is the Life: when slaves are free men, Pharaoh is NOTHING!
What so embarrassing words:
“Having a strong currency is great if you don’t want to sell anything and intend to live off un-employment benefit – like the Spanish and Irish.”
Such comments are unworthy of a gentleman; such words are worthy only of a Pharaoh, or a pirate! You hate the Euro because you would love the Euro!
Did you read this?
“Krugman recommended a housing bubble, literally!
-To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.”
-In time this overhang will be worked off. Meanwhile, economic policy should encourage other spending to offset the temporary slump in business investment. Low interest rates, which promote spending on housing and other durable goods, are the main answer. But it seems inevitable that there will also be a fiscal stimulus package.
-The good news about the U.S. economy is that it fell into recession, but it didn’t fall off a cliff. Most of the credit probably goes to the dogged optimism of American consumers, but the Fed’s dramatic interest rate cuts helped keep housing strong even as business investment plunged”
Spanish and Irish ‘crashes’ are not due to the Euro but to the housing bubble; also other countries with similar problems: USA, UK, Iceland, …
Now, some men are thinking: a new bubble! Or … , dark years. Oh God!
Remember, once in the eurozone, no more tourism from the US or Canada, as no one would be able to afford Iceland with euro prices. Iceland would be overrun by germans, and euro trash travellers, looking to regain some of their lost money.
One last remark to return on topic (Iceland):
Britain has 60,000,000 people.
Iceland has 400,000.
We really cannot compare the Pound and the Krona, HSBC and Barclays with Landsbanki and Glitnir.
Anybody interested in these things should read a great piece by Buiter, a professor at London School of Economics:
“Is London really Reykjavik-on-Thames?”
http://blogs.ft.com/maverecon/2008/11/how-likely-is-a-sterling-crisis-or-is-london-really-reykjavik-on-thames/
@Jim
1- The ‘deposit rate’ which is the lowest ceiling for the european interest rate is actually 0.25%. Check on http://www.ecb.int
As your fellow compatriot John Maynard Keynes explained 80 years ago, when interest rates approach zero, traditional monetary policy becomes ineffective, the so-called liquidity trap. The Bank of England has therefore started to engage in aggressive “quantitative easing”, that is, printing banknotes… Expect inflation to rise again in 12-18 months from now.
2-The devaluation is temporary? Nobody actually knows. The pound has fallen as a result of market operations (traders selling stocks and bonds denominated in ponds), not because the Bank of England engineered any devaluation. If inflation remains higher in the UK than in the eurozone (and depreciations facilitate inflation because oil is priced in dollars), we should expect that the pound will keep on weaken vis-a-vis the euro in the long run. The other option is that Britain raises interest rates and attracts capital to defend the currency. But this is unlikely while in recession.
@Peter
1-The eurozone economy, accept it or not, is simply too big to be affected by any pound movement. And eurozone countries trade mostly with each other (80%). The only people directly affected are the British themselves! If I can make any prediction, the pound will have to slide further before your trade deficit can be closed.
2-What really matters actually is the current account balance. A persistent deficit means that the country is consuming more than it produces, above its means. That’s what Britain has been doing for the last 15 years.
3-Like many other people, the French you are talking about work and live in the City, not in Birmingham or Glasgow. London is the biggest financial centre in Europe and is also the biggest exchange for all euro-trade operations. Even if it’s out of the eurozone, it took enormous advantage from the financial integration on the ‘mainland’. We call that free-riding ;)
Davis said:
“im my point of view Iceland betrayed Norway!”
Dont be so quick to react to this, for Iceland to join EU some changes must be made,
there will have to be a referendum, no way around that, the consitution will also have to be changed,
for the change of the constitution to be valid there must be a election,
in a election the socialists and left green will loose big, the winners of that election will be the old and rotten Progressive party and it will choose to work with the Independence party like always before, no one will vote for the Social democrats,
the Social democrats are the only political party that wants to join the EU.
chesmond said:
“*coughs* “The UK is the 5th biggest exporter in the world, after China,Japan,US,Germany.”
Do you think the original poster would have ever checked my facts or his to be able to contradict me?
Davis – “im my point of view Iceland betrayed Norway!” Betrayed Norway?? Either we are pro or against entering the EU, I can for sure say I have never read that we feel betraded by Icelanders. A good Norwegian reply on your argument would probably be “HÆH?”.
We just hope Iceland can get through this crisis and it is the Icelanders that must find their way – we concentrate on ours.
PS. Norway is not a person, if you understand…
By the way
We also had Icelandic banks, and I am glad that we have and had a system that were able “to control if the driver used summer- og winther tires when driving on a slippery road”. One bank was stopped kaupthing.no – but it was fixed up in good cooperation with the involved, as I see it. Other banks bought Glitnir.
The worst thing UK has seen in ages is Gordon Brown …… Welcome to Tax Hell, mates \o/
in my point of view Iceland betrayed Norway!coz Norway asked iceland no join EU but they didn´t it!European Union is a fake thing!
im my point of view Iceland betrayed Norway!
@Peter:
*coughs* “The UK is the 5th biggest exporter in the world, after China,Japan,US,Germany.”
Take a look:
http://en.wikipedia.org/wiki/List_of_countries_by_exports
/smartass mode off
(sorry i got to say this since i am a german chap ;) )
That’s all very well Jamie A, but you’ve totally failed to address any of the serious points raised.
I’m pro-Euro for the UK and even I can’t argue with the validity of all of Jim’s and Peter’s points.
Axel, Peter ,Jim!
How typical if i dont agree with you! I am a Europhile that makes no sense, And what does not spelling propley got do with this disscussion,then claiming im some way I cant be English, do you not think you look stupid and arrogant, I therefour think you must be A, neo con B, neo libral c, thacherite! Oh so everybody has got in wrong with joining the Euro and Britian has it right, hang on mintute I thought more nations are quieing to join it! Everybody says the same thing about the UK, no jobs shit working conditions! And yes i respect the French becouse when there getting shafted by there Empolyers they hit the streets and demand action not like here we get ripped off, do overtime dont get paid for it, If we dont like it shown the door! And as for hoildaying in the UK dont make laugth, its more exspenivce to go to crummy haven or butlins or conwail, than go abroad, its a great job my freind went befour to tell me! And yes the 2 class system here i wish the French had come over here and got rid of our lot, David Cammrone, really understands in his oxford home, what a complete pig! and willam hague who said the Euro wouid go no where, Oh please he is anouther one !
Francesco said:
“Devaluing is like curing cancer with aspirin, maybe you just sneeze a bit less.
What does the UK export today exactly? Isn’t Tesco (a supermarket) the biggest employer nowadays? And all those nice holidays on the mediterranean sea, arent they now 20% more expensive for the British working class?”
The UK is the 5th biggest exporter in the world, after China,Japan,US,Germany.
Like many people you think the strength of a currency is important becuase it allows its citizens to buy cheap goods and holidays abroad. It isn’t. Who suffers when the British spend their holidays outside the Eurozone and foreign tourists choose UK over Europe to shop and holiday? Eurozone employers and employees.
Jamie A said:
“You feel sorry for the Eurozone! You two are dilluded, ALL the big econmists of the world say the Euro was a complete succes”
Given that you are illiterate and on a minimum wage I doubt you will be see the advantages of not being in the Eurozone. Food prices on the ‘mainland’ as you put it have little effect in the UK becuase the UK produces most of its own food. If you think wages and working conditions are better in France, well, tell that to the 100’s of thousands of French who moved to the UK to avoid the stifling taxes and work environment.
(I’m not bashing France, simply pointing out your irrelevant argument).
The Euro has been a success for some countries, however it has been a disaster for others, the PIIGS are often quoted. For the UK is would have cause an even greater economic boom and bust than it did in Ireland.
There is NOBODY (except Mandelson, LOL) who has suggested the UK should have joined in the past or should join in the future.
We makes me conclude, Jamie A, that you have reason to want to join the Euro because you are connected to a Eurozone country somehow.
1. The UK was able to reduce its interest rate to 0.5%. That large interest rate reduction was clearly the correct decision (no economist thinks otherwise) and it is expected to stay at that rate for several months to come. If the UK were in the Eurozone, that would not have been possible. If you disagree with that, then your Europhile tendencies are overtly irrational and you probably need therapy!
2. The pound’s TEMPORARY devaluation of approx a third initially was equivalent to an additional interest rate reduction of approx 4% to 5% (in terms of UK economic stimulus). Economists of all persuasions are agreed on that equivalence. The TEMPORARY devaluation was necessary because interest rates were already heading towards zero and so their continued effectiveness was reducing.
3. Note that even the interest rate cut and devaluation combined were not sufficient. Further economic stimuli (VAT reduction, quantitative easing, etc) were also required.
4. Thank God the UK was not in the Eurozone, otherwise points 1 and 2 would not have been possible and our recession would therefore have been deeper and much much longer.
+1 @Francesco and @Jamie A.
Reasonable arguments. Best comments i have read so far here. I totally agree with you.
Jamie A,
“I wouid vote tomorro to scrap the pound for the Euro!”
wait just a little bit longer and scrap the Labor party for the Conservative party, they will then scrap the EU :), when that happens you can stop being sick with anger.
in my mind the EU is some sort of virus that infects healthy nations and drains their will to live as free people, if you say no to the EU it will lean on you until you change your mind,
you will vote again and again until you say what you are told to say, this makes me sick with anger.
Francesco,
I agree with your comment on GBP vs euro. Devaluation is something which does not work out in the end.
If I compare my own country with the UK: before the kreppa everything in the UK was twice as expensive as in the Netherlands and now it is about 20 % more expensive, while average wages in the UK are not much higher than in the Netherlands.
BTW in Germany many things are even cheaper than in NL (especially eating out).
From where I live it takes about 1 hour to drive to Germany. Every few weeks I enjoy to drive to Germany with mrs.Niels to go shopping and eating out in Germany. It is nice & easy to be able to do this without having to change any money.
Many germans like to go to NL too.
NL does not import very much from the UK while I am sure that british supermarkets are full of dutch products.
Peter – London! Jim!
You feel sorry for the Eurozone! You two are dilluded, ALL the big econmists of the world say the Euro was a complete succes, even the new board member of the Bank of England who is a well known figure. I think they feel sorry for us and the mess we are in and are weak cunrrency, Exports what actuley do we make and produce, we now have a smaller econmey than France! And buying food produce from the mainland is now more exspensive. my sallary was smaller befour this mess compared to my freinds in France and now its worse. You people make me sick with anger, And dont fool people the Bank of England follows the E.C.B and the F.E.Ds lead, and whats good for the city is never good for places like Scotland or up north or any where elses in the UK thats how it has always been when it comes to setting intrest rates. I wouid vote tomorro to scrap the pound for the Euro!
POUND vs EURO:
You don’t get an industrial policy by devaluing your currency (thus cutting your nominal wages in foreign value). Maybe stopping outsourcing and invest in high-tech manufacturing is more effective at making you an industrial powerhouse (see Germany).
Devaluing is like curing cancer with aspirin, maybe you just sneeze a bit less.
What does the UK export today exactly? Isn’t Tesco (a supermarket) the biggest employer nowadays? And all those nice holidays on the mediterranean sea, arent they now 20% more expensive for the British working class?
I can think of a country, Italy, that devalued, devalued, devalued… and ended up with chronic inflation and exports made competitive only by pricing..
Have a nice time, Britain!
I read comments like “keep Iceland pure” “democracy is failing”.. Are Icelanders so scared about the EU? What are they talking about?
Being a small economy, depending on imports and willing to take part in globalization (the ‘lifestyle’ how they call it), Iceland just cannot afford to have its own monetary policy and currency. Especially now that its financial system must be built from scratch.
And why all this nationalism? Does anybody know here that Iceland ALREADY takes in 80% of EU directives because it is part of EEA? Iceland (like Norway) implements EU laws without being represented at either the parliament or council level. Great democracy you have now!
Being in the EU would allow Icelandic citizens to shape economic policy a bit more than today, rather than having to slavishly adopt all that other countries decide for Iceland.
The only obstacle I see for Icelandic pride is fisheries. I understand that this goes down in the national psyche and history as a matter of pride and self-reliance. But I’m sure Iceland will be able to strike a good deal. Moreover it will likely get a lot of money like the other arctic regions (Lappland, ie) under the Cohesion funds scheme.
Icelanders, don’t be scared by EU memberhip.
if someone are terrorists, then the country which on purpose insults and harms other country like Iceland..
and danish seem to have bad sense of humor..
Pedro:
“The British probably regret they didn’t adopt EUR when it was the right time to do it.”
The UK will not take up the Euro, you are kidding yourself if you think they regret not having the Euro.
Having the Euro would have meant a crash like Ireland and Spain are going to get; long and very very severe.
Britain devalued its currency and what a great benefit that has been, Euro customers are flocking to the UK to buy British goods. In Ireland customers are driving to Northern Ireland to do all their shopping. Having a strong currency is great if you don’t want to sell anything and intend to live off un-employment benefit – like the Spanish and Irish.
“The British probably regret they didn’t adopt EUR when it was the right time to do it”
Polls in the UK consistently reveal that over 80% of the population is against adopting the euro and so, no, we don’t regret it! At the start of the recession it provided the UK with the flexibility to lower interest rates by 5% and temporarily devalue the currency by a third. Every Eurozone country would like the flexibility to set its own interest rates to match its own particular circumstances and position in the economic cycle, rather than being restricted to follow the Euroherd. I feel sorry for the Eurozone countries, I really do.
I have lived in different coutries in EU (new EU counties as well as old EU countries). I see absolutely no reason to be against EU. Some ppl say living get more expensive…. well, how could they know if without EU it would have been cheaper ? It is a matter of global price stability and not EU.
Single currency is good as well. The British probably regret they didn’t adopt EUR when it was the right time to do it. They will have to wait another 10 years or more to see their currency be strong again, if ever. With EU waiting is more costly. Some ppl say that some time into the future the entire project would fail (every empire failed in the past). So what ? Wouldn’t it be better to be in it and benefit from it when still possible ?
wow im amazed
ICELAND SHOULD JOIN NORTH KOREA INSTEAD OF THE E.U AT LEAST THEY HAS THE ENVY OF THE WORLD
Oh come on..stop being so sensitive. Are we not to be treated like adults and allowed to judge for ourselves rather than let others do it for us. Icelanders engaged rather aggresively in this global game of monopoly and so unfortunately they are now paying the price. As a second generation Jewish Holocaust survivor I think you need to get these comments into perspective.
It looks as though the government of Iceland is acting on its own accord and not listening to the voices of the common Icelanders. Democracy is failing in this republic. Let the voices of the people be heard. God save the Republic of Iceland, keep it out of the European Union. Keep Iceland pure.
well , its just humor , gotta live with it and accept it as it comes .
in other hand … what other solution is out there for iceland ….i dont know . but at least its worth the shot. so I say , go for it , and hope for the best.
as it looks , its a 50 50 situation. lets hope its a positive one .
Gongratulations for your web from spain. I love Iceland and i would like to go very soon.
lol at last SIR EURO has been censored
[…] Original post: Denmark Newspaper Jyllands Posten published joke about Iceland EU … […]
I originally thought Steve was offended by my comment, but it seems SIR EURO had been on yet another one of his uppercase rants, so props to IceNews for given him a well-deserved spanking.
Comment from IceNews
I deleted the above comment published by SIR EURO, and IceNews would also like to remind our other uses that racist remarks, swindles, comments, and the like will absolutely not be tolerated here at IceNews, especially when they are against our home country of Iceland. You are more than welcomed to write a comment, whether it be a positive or negative view, without racist marks that can be taken as offensive to natives of the country. This again goes not just for comments against Iceland or Icelanders, but any race or country or religion and so on.
We allow the option for our readers to comment, discuss, and debate articles as IceNews will publish at a neutral standpoint, so we ask our commenters to also be mature about their comments and take into consideration many people from all over the world will be reading them as they are attached to the article.
Thank you and enjoy commenting!
Comment from IceNews
Please delete the above comment, whoever wrote it is ignorant and stupid.
First the Danish cartoons insulted the Prophet Mohammed and now they insult Queen Johanna.
Christ! You’d have thought that these people had figured out by now that it’s best not to make fun of terrorists!
[j/k]