Word: icelandic
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...wish for the tiny nation of just 320,000 people. But last fall's abrupt economic collapse forced Iceland to rethink its traditional skepticism about the E.U. In the space of just days, as huge debts tore at Iceland's banking system, the country went from being one of the world's richest nations per head to virtually a failed economy. The statistics tell a stunning story: Iceland's currency, the krona, shed nearly half its value; inflation rose to over 12%; the stock exchange fell 89%; a $10 billion IMF bailout was sought; half the country's businesses became...
...Iceland sees the E.U. as a safe haven from the world's harsh economic winds. In particular, euro membership would allow it to ditch the crippled krona. The E.U. would gain a new member with similar values to its own, which would help strengthen its reach as a global power. In return, Iceland can expect accession talks to move at a double-quick pace. As a member of the European Economic Area (EEA), Iceland already has access to the E.U.'s single market. It is also part of Europe's border-free Schengen zone, and virtually all the other...
...Even the touchy subject of fishing rights could be overcome. Iceland has long jealously guarded the sovereignty of the lucrative, 200-mile (320-km) fishing zone around the island. Fish and seafood account for 37% of Iceland's exports, and employ 8% of the work force; even ardent Euro-enthusiasts are loath to see their prime natural resource fall under the sway of the E.U.'s controversial Common Fisheries Policy (CFP). But while Reykjavik cannot expect an exemption, it could negotiate special protocols to take account of the importance of the fishing sector to the nation...
...this means that Iceland could leapfrog other wannabe members in the E.U. queue such as Albania and Turkey, and join at the same time as the current frontrunner candidate country, Croatia. E.U. enlargement commissioner Olli Rehn told U.K. daily The Guardian in January that it could happen as soon as 2011, although most other scenarios put it at 2012 or 2013. "The E.U. prefers two countries joining at the same time rather than individually," Rehn said. "If Iceland applies shortly and the negotiations are rapid, Croatia and Iceland could join the E.U. in parallel...
...Joining the euro could happen soon after that. Reykjavik officials have backed down from their earlier talk about "unilateral euroization" - using the single currency without going through the rigorous euro accession process - but once the economy settles, joining could be relatively straight-forward. Iceland's debt, deficit and inflation rates currently too high to fulfill the euro criteria - are expected to fall fast over the next few years to meet the entry demands. (See pictures of the Top 10 scared traders...