Martin Wolf on a VÍB meeting: „An impressive recovery in Iceland“

Martin Wolf, chief economics commentator at the Financial Times, was a speaker at a meeting held by VÍB, the wealth management division of Íslandsbanki, yesterday. The topic of the meeting was Iceland - economic recovery or policy crisis? Is Iceland well on its way out of the economic crisis or is it necessary to change economic policy to accelerate the recovery?

Mr. Wolf said that Iceland had made an impressive recovery compared to other countries that were hit hard in the crisis, for example Greece, Ireland, Spain and Portugal. The devaluation of the Icelandic krona had been a big help in spite of the surge in inflation that it had provoked.

Accelerating debt reduction in the household sector makes sense as debt levels still seem to be very high. Now is the time for Iceland to start defining its competitive advantages where obvious possibilities are: natural resources and skilled labour. Mr Wolf said Iceland truly is a rich country: "You are seriously lucky people."

Martin Wolf discussed some of the key questions facing Iceland, for example whether to join the European Union, how to abolish the currency controls and how to handle foreign direct investments.

In regard to the European Union Martin Wolf said: "Why on earth would you want to join something as disfunctional as the EU? Have you been paying any attention to what is going on there? Iceland would have no influence on EU policies what so ever and it could well lose control over its valuable resources."

The meeting is now viewable on VÍB´s website:

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