Brussels, 08/02/2011 (Agence Europe) - On Monday 7 February, Commissioner for Economic and Monetary Affairs Olli Rehn stressed the importance for Iceland of setting in place a strategy aiming to step up its controls on flows of capital, after an interview with Icelandic Economy Minister Árni Páll Árnason. “The free movement of capital is an important requirement in the European Union”, he said, promising the European Commission's technical assistance in creating this strategy. Árnason stated that his country respected all European law, “except” when it comes to capital controls. “It is not an easy job” to bring in this kind of measure whilst avoiding negative effects as far as possible, he added. Iceland, which is officially a candidate country to join the EU (EUROPE 10188), took the opportunity to submit its first pre-accession economic programme to the European institution.
Rehn praised the way Iceland is implementing the economic adjustment it negotiated, while going through serious economic crisis, with the IMF in exchange for financial aid: “We welcome the efforts of the government to reduce the budgetary deficits and to achieve a first budgetary surplus this year”. He also approved of the “mutually acceptable solution” between Iceland on the one hand and the Netherlands and the United Kingdom on the other. The collapse of the Icelandic bank Icesave affected more than 300,000 British and Dutch savers who had placed their savings with the bank. Under the agreement which has yet to be definitively approved by the national parliament, Reykjavik will undertake to compensate London and Amsterdam to the tune of €3.9 billion in total, progressively between 2016 and 2046. The higher reimbursement period and lower interest rates which were negotiated proved satisfactory to the Icelandic people, who rejected a previous agreement. (M.B./transl.fl)