The EU learns about fishing and banking from tiny Iceland

José Manuel Barroso, President of the European Commission (on the right), received Sigmundur Davíd Gunnlaugsson, Icelandic Prime Minister. (EC Audiovisual Services, 16/07/2013 ).

Sigmundur Davíð Gunnlaugsson, the Prime Minister of Iceland, visited the European Union yesterday and was received by its two presidents. The Icelander first went to the Berlaymont, the Commission’s  headquarters. There he was rather surprised. It was the first time that Manuel Barroso was so blatant, almost rude, with a visiting PM. Commenting on the pending until September discussion in Iceland’s Parliament over a possible withdrawal of the country’s EU membership application, the President of the Commission said: “the clock is ticking, and it is also in the shared interest of us all that this decision is taken without further delay”.

However, it was not only the most probable withdrawal of Iceland’s EU membership application that made Barroso furious. Some minutes before their joint Press conference, Gunnlaugsson had stopped only one step away from declaring a ‘mackerel war’ against the EU. Let’s fish in this.

The war of fish

The European Union accuses Iceland of overfishing the mackerel stocks in the North East Atlantic. The island country almost laughs with this, actually challenging the EU’s scientific calibre and questioning its honesty. Not to forget that fishing is the lifeline of Iceland. On many occasions during the past decades a number of European countries like Britain and Ireland have declared ‘troller wars’ against Iceland’s fishermen. In the 1970s and the 1980s Iceland fought with Britain and the European Union the ‘cod war’ over the fishing rights of this delicious bite.

This was not a small thing at all. Peaceful but stubborn Icelanders reciprocated and defended successfully their fishing rights, which are vital for their existence in the frozen island. Now Iceland is ready to reciprocate if the European Union decides to impose sanctions on the island for allegedly overfishing the mackerel stocks. Ireland for example asks for very severe sanctions going as far as blocking Iceland altogether.

Banking lessons

But it’s only the fish that make the EU dignitaries angry with the Icelanders. In the peak of the western credit crunch, the tiny island state ridiculed the entire Union and the European Central Bank because against their will allowed all its banks to go bankrupt. Consequently Iceland didn’t pay their debts. Let’s follow the money.

In September 2008 Iceland ignored the dictums of the ECB and the Commission and let its own three major banks go bankrupt. Then it denied reimbursing the British, the Dutch and other European depositors. Iceland didn’t nationalise its three banks (Kaupthing, Landsbanki and Glitnir) as Ireland and other EU countries did. Consequently, the Icelandic Republic and its people were not obliged to pay for the blunders, the imprudence and the greed of bankers.

Back to fishing

Going back to fishing the Icelanders are accustomed to the jealousy mainly of the Irish and the British for their abundant fish stocks. Now it’s the entire European Union and Commissioner Damanaki who threaten the tiny island country with sanctions for allegedly overfishing the mackerel. The Commissioner will reportedly decide within this month on the kind of sanctions to be imposed on Iceland and the Faroe Islands.

In view of that, according to Ireland’s National Television and Radio Broadcaster, RTÉ, Iceland’s PM told Barroso yesterday that his country “had been dedicated to sustainable fishing for decades and it was now possible to see the results of that”. This obviously means ‘no lessons  taken from EU’.

Gunnlaugsson however went further and suggested that, “Iceland may be able to ‘assist’ the EU with its approach, increase fish numbers and boost the value of European fisheries tremendously”. Seemingly it was this statement that made Barroso furious. The tiny island that gave a good lesson to the EU on banking now comes again and proposes another one in fishing. It’s like the Icelanders are avenging the EU and the European Central Bank for what they did to them, when their country decided not to redeem the EU depositors in the Icelandic banks.

Presumably the tiny Iceland is about to humiliate the EU once more. Banking and fishing might not be connected in any way but in this case the European Union will learn the hard way that others can do better in both.