Tuesday 8 January 2013

Iceland And The EEA

It's been quite heartening and uplifting in the last few days that a handful of bloggers, and committed commenters, have rattled Open Europe's cage to the extent that they now acknowledge, albeit very very grudgingly, far from having no influence Norway does in fact have a say within the EEA Agreement. Given the tone of Mats Persson's Telegraph article, one suspects that Open Europe is not used to having its 'eurosceptic' credentials questioned, particularly with simple things like facts. This is especially important given that our esteemed Prime Minister reads blog comments.

Autonomous Mind has another example of Norway saying no to the EU regarding EU plans for harmonisation of environmental policy relating to oil and gas energy:
The Norwegian government has taken the view that the proposed regulation by the European Commission falls outside the geographic and substantive scope of the EEA agreement.
As AM notes:
Oh dear, David Cameron and Open Europe caught out lying again. You would think the media would be all over this, unless of course they have vested interests or are getting pressure from their owner barons to exercise bias by omission and ignore this important story…
Open Europe also seem oblivious that the EEA is not just Norway, but also Iceland and Liechtenstein. And it is to Iceland we turn our attention as it is involved with one of biggest rejections of the EU there has ever been by an EEA member. The dispute relates to the collapse of the Icesave online savings account in 2008 which infamously prompted the UK to invoke terrorist legislation against it. Crucially, when Icesave collapsed, EU countries, notably the UK and the Netherlands, attempted to force Iceland to fulfill its EU obligations. The arguments centered around two legal arguments:
  1. ...that the Icelandic government is obliged to guarantee at least the first €20,000 in Icesave accounts;

  2. ...that Iceland's actions surrounding the collapse of Landsbanki are discriminatory against non-Icelandic creditors.
The first challenge comes under EU Directive 94/19/EC, which was incorporated into Icelandic law in 1999, the second is that Iceland is in breach of its obligations under Article 4 of the EEA Agreement which says:
Within the scope of application of this Agreement, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited.
The second is in accordance of Article 7 of the Treaty of Rome. Iceland's reluctance to reimburse foreign countries for money lost in its banks prompted, at the time, the following conversation between Alistair Darling and the Icelandic Finance Minister Árni Mathiesen (now hidden behind the Times firewall):
(AD) Do I understand that you guarantee the deposits of Icelandic depositors?

(AM)Yes, we guarantee the deposits in the banks and branches here in Iceland.

(AD) But not the branches outside Iceland?

(AM) No, not outside of what was already in the letter that we sent.

(AD) But is that not in breach of the EEA Treaty?

(AM) No, we don’t think so and think this is actually in line with what other countries have been doing over recent days.
Curiously, Alistair Darling in his book, Back from the Brink doesn't mention this conversation nor indeed any reference whatsoever to the EEA. Yet Iceland wasn't for backing down - a resolution of the Joint Parliamentary Committee of the EEA (opens as a Word Document) adopted unanimously on 28 October 2009 emphasised:
...the Directive’s lack of clarity over the legal obligations of governments if national guarantee funds, which are funded by contributions from relevant credit institutions, do not suffice for payments following a banking crisis, and more importantly if an entire banking system of a country collapses;
...underlines that the shortcomings of the Directive became apparent in October 2008 when the banking crisis in Iceland spilled over to the economies of other EEA States;
In other words Iceland, via the EEA, is contesting both charges, charges that are still ongoing amid complex legal arguments after four years and two referendums later. A judgement that rather than be passed by an EU court will be ruled on by the EFTA court instead, and is due on 28th of this month. Iceland's case for the defence can be found here.

And that is the point, Iceland is a small country with a population of circa 313,000; a country with fewer people than the London Borough of Croydon which has 363,000, yet here it is with resilience, influence and the ability to say no. One can only look on in envy.

Iceland's main problem is unfortunately its size. That it may have to capitulate is less to do with flaws in the EEA/EFTA agreement but instead that it is being bullied, shamefully by, as the Icesave episode demonstrates, the UK. Being a member of the EU will not resolve that, ask Ireland, Czech Republic or Luxemburg

However, that Iceland can stand up for itself, while the UK will have no choice, but to adopt the attributes of a nodding dog within the EEA, is quite frankly absurd.

More to follow...


  1. I wonder if Iceland's politicians stand up for the true interest of their people precisely because they are a small country and famously, all related?

    In this country the political class is, to a much greater extent, a caste of its own isolated with the westminster media hacks and the political pundits of the BBC, who colletively couldn't give a shit about the rest of us.

  2. @cuffleyburgers, I'm sure there's merit in that about Iceland, and as you rightly point out our political class by contrast are somewhat 'distant'

    It's why leaving the EU will not on its own solve our problems, it's only a start.

    But at least they also have the options