Industry group urges reforms after Iceland rejects EU talks

The Confederation of Icelandic Industries has urged the government to begin immediate reforms to strengthen competitiveness and improve economic management after voters rejected opening European Union membership talks, mbl.is reported.

“No to membership talks is not a yes to the status quo,” Sigurður Hannesson, the organisation’s director general, said in a statement.

He said Iceland needed to lower inflation and interest rates, ensure an adequate supply of electricity, accelerate infrastructure development, simplify regulations and strengthen the environment for investment and innovation.

“These tasks do not disappear with the result of the referendum. We must solve them ourselves,” Hannesson said.

The referendum result was announced shortly before 10am, with 52.8% voting against opening accession talks with the European Union.

The organisation called for a national agreement between the government and the social partners on measures to reduce inflation and increase value creation in order to improve living standards.

It said the referendum result did not change the fact that Europe was the most important market for Icelandic industry, while the European Economic Area agreement remained Iceland’s most important trade agreement. A large part of Icelandic industry operates in Europe’s internal market, and common regulations give Icelandic companies access to it, the statement said.

The Confederation also stressed the importance of the EEA agreement and called for a clear government policy on how Iceland would safeguard its operation.

It said Iceland needed to take part earlier and more forcefully in shaping EEA legislation, while ensuring that Icelandic companies were not subjected to unnecessary gold-plating of regulations. It also called for Icelandic companies to be guaranteed participation in European markets, cooperation programmes and Europe’s new industrial and security policies.

The organisation urged the government to establish increased and regular consultation with the business community on EEA matters. It said a special effort was needed to address the implementation backlog, increase transparency about the status of issues and give companies greater predictability.

The result also meant that Iceland would continue to base its international trade policy on cooperation through the European Free Trade Association and on its own trade agreements, the statement said. Iceland therefore needed to protect its interests more actively within EFTA in relation to existing free trade agreements while also pursuing new markets.