ICELAND
StEAmINg
towards
rECovEry
a
fter the party, the hangover. the mind- Icelandic Industries (FII) wants. ‘It’s vital that apply, it will strengthen our currency,’ she says.
obas
boggling extent to which Iceland’s policies for the future are formulated,’ said a this is something it badly needs: last year the .comm/r
banks overstretched themselves left spokesman. ‘the only realistic solution is to join Icelandic krona lost more than 80 per cent of kphoto
the national currency, the krona, in shreds, and the EU and adopt the euro.’ its value against the euro.
istoc
thrust the 320,000 population into hitherto the Independence Party, in government for For the fi rst time Iceland is considering
unknown worlds of unemployment and 18 years, took the rap for Iceland’s economic making incentives available for foreign direct
negative equity. implosion and was forced to resign in January. investment, though details have yet to be
devastating, yes. Irredeemable, no. Elections in april saw the social democrats determined. ‘the krona’s depreciation now
Iceland has had to swallow large doses emerge victorious and join a coalition with the makes us one of the most competitive locations
of unpleasant medicine but minds are now Left Greens. in Europe,’ says thordur Hilmarsson, Invest in
focusing on a formula for recovery. this the new prime minister, former air hostess Iceland’s managing director.
will probably mean relinquishing some Johanna sigurdardottir, is also eager to join the Political stability, cheap renewable energy,
independence, long a source of national pride. EU. Iceland hopes to start accession talks in and a belief that Iceland’s worst may be over
a loan from the international monetary fund July. Ms sigurdardottir would like a referendum are all reasons for interest from around the
(IMF) staved off collapse; and insularity is likely before the end of 2010 and, if there’s a ‘yes’ world. ‘some industries have to face the fact
to become a thing of the past. an application to vote, to adopt the euro within four years. that their governments will impose carbon
join the European Union – once unimaginable despite 15 per cent infl ation and a huge taxes,’ says Hilmarsson. suddenly this makes
– seems imminent. defi cit, she’s confi dent that Iceland’s approach Iceland’s inexhaustible sources of renewable
Certainly that’s what the Federation of to Brussels will not be rebuffed. ‘as soon as we energy very appealing.
pAthfINDEr buSINESS l JUNE/JULY 2009 13
PBS12 pp12-19 Iceland.indd 25 5/6/09 15:26:35
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