An Important Milestone in Iceland´s EU Accession Talks

18.12.2012

  • Frá ríkjaráðstefnunni í morgun

Negotiations were launched this morning on six chapters in Iceland's accession talks with the European Union at an Intergovernmental Conference (IGC) in Brussels. The Icelandic delegation was headed by Foreign Minister Össur Skarphéðinsson. The chapters opened are on Free Movement on Goods, Taxation, Economic and Monetary Policy, Regional Policy and Coordination of Structural Instruments, Environment and External Relations. Further talks will now commence. Chapter 8 on Competition, that was opened in March 2012, was provisionally closed at today's IGC. A total of 27 out of 33 chapters have now been opened and 11 have been closed provisionally.

In his address at the IGC Foreign Minister Skarphéðinsson emphasized Iceland´s commitment to the accession process and praised the solid work of the Cypriot Presidency. He welcomed that the accession talks are now increasingly focused on chapters outside the EEA Agreement, such as on Economic and Monetary Policy and Regional Policy, which he said were of utmost importance to Iceland. Ahead are talks on chapters such as fisheries and agriculture and the ultimate goal is to come home with an Accession Treaty and allow the Icelandic people to vote on membership in a referendum. The Foreign Minister said he was more confident that ever that joining the EU was the right step for Iceland. Current economic difficulties require more cooperation, not less, and a eurozone that entails greater discipline is a viable option for Iceland, said Foreign Minister Skarphéðinsson.

The next IGC is scheduled to take place in March and will be the first one under the Irish presidency.

Foreign Minister's Skarphéðinsson address

Iceland's Negotiating Position: Chapter 1, Chapter 16, Chapter 17, Chapter 22, Chapter 27, Chapter 30.

Council's Press release

All further information on Iceland's application process can be found on the Negotiation's website.



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Chapter 1 on free movement of goods is part of the EEA agreement and covers legislation on movement of goods and on market surveillance to ensure safety of products on the internal market. On the intergovernmental conference Iceland described how it implements and enforces the acquis under chapter 1. Iceland has the legal framework and institutional capacity to continue to implement the acquis. In its negotiating position Iceland describes how the EU acquis on free movement of goods is enforced and the how the administrative framework for market surveillance is established. Iceland requests two special solutions in this chapter, to maintain stricter limits for cadmium in phosphorus fertilizer and to be exempted from the language requirements for medicinal products which are sold in low volume to ensure access to medicines in Iceland.

Chapter 16 on Taxation is not part of the EEA Agreement. However, Icelandic legislation is largely in line with the acquis as stated at the Intergovernmental Conference this morning. Iceland will establish task forces that will deliver time and action plans on legislative alignment for VAT and energy excise duties. Iceland requests an exemption from VAT on passenger transport, work of authors and composers and funeral services as well as a permission to apply a reduced VAT rate for admission tolls related to land transportation. Iceland requests a transitional period of five years to align rules related to personal allowances of alcohol and tobacco for travelers and crew members travelling from abroad, as excise duties on alcohol and tobacco are an important revenue source for the Icelandic Treasury. The current system of duty free shops in Iceland, both at entry and departure, is not in line with the acquis. However, this issue needs to be addressed in the negotiations with the view to maintain a viable economy for the airport company and to protect the labour market in the region.

Negotiating chapter 17 on Economic and Monetary Policy falls outside the scope of the EEA Agreement, but all Member States of the European Union have to join the euro area, once the necessary conditions are fulfilled. In Iceland's negotiating position (PDF file) it is stated that there are important links between the task of removing restrictions on capital outflows (chapter 4), prudential rules related to foreign currency risk (chapter 9), and balance of payments and monetary stability, that need to be discussed in the course of the negotiations. Furthermore, the negotiating position states that Iceland plans to participate in the Exchange Rate Mechanism (ERM II), as soon as conditions permit and subsequently adopt the euro as conditions permit following its ERM II participation. The negotiating position also states that although Iceland does not currently meet all the Maastricht criteria for the introduction of the euro, its economic development is on the right track. The overall target is that general government balance will be positive in 2014. Gross government debt was just under 100% of GDP at the end of 2011, but in view of the achieved and planned fiscal consolidation, and assets held by the Treasury, public debt levels should not inhibit fulfillment of the Maastricht criteria.

Chapter 22 on regional policy and coordination of structural instruments is not part of the EEA- agreement. The special characteristics of Iceland is emphasized in the negotiation position of Iceland e .g. its small population, low population density, insularity and difficult topography. Iceland requests special measures and additional financing in order to ensure the interests of rural areas in the country and to enable an effective implementation of regional policy in Iceland in case of membership. A detailed time and action plan has been submitted for the chapter outlining all necessary preparations and key responsibilities for participating in EU regional policy. Working groups have been established for addressing key aspects in the preparations such as programming, institutional set-up and the design of a monitoring and information system.

Chapter 27 on the environment is partly covered by the EEA-Agreement but a large part of the EU acquis on the environment has already been implemented in Iceland. Nature protection is outside the scope of the EEA-Agreement but it is an important part of the EU environmental policies. The EU legislation on the environment is broad in scope and covers, in particular, pollution prevention such as air quality, noise pollution, water protection and water management, chemicals, waste management, surveillance, conservation of habitat and wild flora and fauna, protection of forests, forestry and the climate. EU environmental policy aims at supporting sustainable management and to protect the environment to the benefit of the present and future generations. In the negotiation position Iceland requests special solutions for the hunting and trade in certain wild bird species, hunting of the Icelandic fox and a few whale species. The negotiation position also outlines the uniqueness of Icelandic nature and the goals of nature conservation in Iceland.

The negotiation position for Chapter 30 covers the commercial policy of the EU, development policy and humanitarian aid. At the intergovernmental conference it was noted that even though the negotiating chapter is largely outside the scope of the EEA Agreement the policies of Iceland and the EU are based on the same international norms and objectives. As regards external trade, Iceland requests solutions which will allow for continued duty-free importation of third countries of inputs for the energy-intensive industries, raw material for fish processing plants, and inputs for the fisheries and aquaculture sectors. In addition Iceland seeks cooperation with the EU to minimize the effect of possible accession on trade with third countries as well as placing emphasis on keeping the close relations with the Faroe Islands, reflected in the Hoyvik-Agreement. The position makes certain reservations relating to customs tariffs for agricultural products, stating that the Chapter will not be closed until the negotiations on the agricultural chapter have been concluded. Iceland's policy in the field of development cooperation as well as emergency relief and humanitarian aid is compatible with the policies of the EU. According to the Parliamentary Resolution on a Strategy for Iceland's International Development Cooperation 2011-2014, Iceland supports the UN and EU goals on providing 0,7% of gross national income for official development assistance and intends to reach it in 2019.