Iceland is a country that fascinates most of us with its stunning sceneries and strong liberal outlook, where independence and self-sufficiency are dear to any Icelander’s heart.
Settled by Norwegian and Celtic immigrants during the late 9th and 10th centuries A.D., Iceland is proud to be the world's oldest functioning legislative assembly, called the Althingi, which was established in 930.
Iceland's Scandinavian-type social-market economy combines a capitalist structure and free-market principles with an extensive welfare system. The economy depends heavily on the fishing industry, which provides 40% of merchandise export earnings, more than 12% of GDP, and employs nearly 5% of the work force. Since 2010, tourism has become the main pillar of Icelandic economic growth, with the number of tourists expected to reach or exceed 4.5 times the Icelandic population in the next couple of years.
Abundant geothermal and hydropower sources have attracted substantial foreign investments in the aluminum sector, boosted economic growth, and sparked some interest from high-tech firms looking to establish data centres using cheap green energy.
The 2008 financial crisis is still vivid in everyone’s memory and resulted in a sharp depreciation of the krona vis-a-vis other major currencies. The foreign exposure of Icelandic banks, whose loans and other assets totalled more than 10 times the country's GDP became unsustainable. Iceland's three largest banks collapsed later that year.
Tremendous efforts were then deployed to stabilise the krona, by implementing capital controls, reducing Iceland's high budget deficit, containing inflation, addressing high household debt, restructuring the financial sector, and diversifying the economy.
Iceland had initially applied to join the European Union in 2009 and formal negotiations had begun in 2010. However, by 2013 the Government of Iceland dissolved its accession team and suspended its application to join the EU. Now that negotiations seem to be back on the table, many analysts fear issues on fisheries which could potentially derail an agreement, despite being already a full member of the European Economic Area. If an agreement were to be concluded, the accession treaty would be subject to a national referendum and require ratification by every EU state.
We met with Hro Jonatansson, founding partner of Jonatansson & Co Legal Services, a full-service firm specialised in company and commercial law, who joined Eurojuris in 2013.
Hrob describes himself as a family man, father of three who enjoys spending time on the greens and hitting both Austrian & Italian ski slopes every now and then for some winter fun.
Initially puzzled by having to choose between medicine and law, he went for the latter and, since then, hasn’t regretted his decision. He joined the Faculty of Law at the University of Iceland before leaving his beloved island for some full-time American exposure where he pursued his Master’s degree at the School of Law from the University of Virginia.
When we asked him if Iceland joining the EU would have an impact on his business, here’s what he had to say:
“I think that, from a business stand point, Iceland would definitely benefit from joining the EU as Icelandic companies would gain access to the single market. But I am not sure whether it would affect my firm as such.”
He added : “I do not think that the majority of Icelanders would support either resuming the negotiations or entering the EU at this time though. The newly established government has said that the issue of resuming the negotiations with the EU will be put to a referendum in the latter part of its term. Whether that happens remains to be seen. Thus, even if there is a parliament majority for starting the accession negotiations anew, it will not materialise until c.a. 2021, that is if the government prevails. At this point in time, and right in the middle of the turmoil in the EU with the Brexit - which seems to be uncertain, both with regards to whether the UK will exit the EU and if so, on which terms - and the huge influx of immigration into various EU member states, the timing couldn’t be worse. If you add the economic problems in southern Europe, the uncertainty on the euro stability and the general economic stagnation of Europe, I do not think it is likely at all that Iceland would want to join. However, Iceland has now adopted c.a. 70 % of EU legislation via the EEA Agreement and is subject to the four freedoms so it shouldn’t be such a big step to join EU as a full member”.
I you want to meet him in the flesh, you will most probably have to chase him a little but you might get lucky to find him in Lisbon at our upcoming spring congress next 4th to 7th May 2017.