Viewing cable 08REYKJAVIK66, ICELANDIC PRIME MINISTER TO BUSINESS COMMUNITY: STAY THE
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VZCZCXRO2125
PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN
RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHRK #0066 1091811
ZNR UUUUU ZZH
P 181811Z APR 08
FM AMEMBASSY REYKJAVIK
TO RUEHC/SECSTATE WASHDC PRIORITY 3628
INFO RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
UNCLAS REYKJAVIK 000066
SIPDIS
USDOC FOR LEAH MARKOWITZ
TREASURY FOR LAWRENCE NORTON
STOCKHOLM FOR KEITH CURTIS
SIPDIS
E.O. 12958: N/A
TAGS: ECON EFIN IC
SUBJECT: ICELANDIC PRIME MINISTER TO BUSINESS COMMUNITY: STAY THE
COURSE
REF: Reykjavik 55
¶1. (U) Prime Minister Geir Haarde gave a pep talk to the top
Icelandic businessmen assembled at the annual meeting of the
Federation of Icelandic Employers on April 18, and put to rest
rumors that the solution to Iceland's recent economy problems is
unilaterally adopting a foreign currency. Haarde said Icelanders
should not be discouraged by recent short term profit reduction and
emphasized that Iceland has a "unique and enviable status." He
ticked off a list of positive attributes including a fully funded
pension system, a sophisticated fishing sector, a large tourism
sector, new and growing high tech sector and the country's vast
energy resources that are becoming more valuable by the day. He
also reminded everyone of the progress Iceland had made over the
last 17 years with membership in the European Economic Area,
privatization and tax reform. Haarde assured the audience that the
government and the Central Bank are working very hard to resolve the
recent problems, but that patience and discretion are required.
¶2. (U) Haarde said in no uncertain terms that Iceland would not
unilaterally adopt a foreign currency. He laid out two options: 1)
stay outside of the European Union and keep the Icelandic krona or
2) join the EU and adopt the Euro. Haarde said the latter was the
worse option. He cited lost of sovereignty in bilateral Free Trade
Agreements, financial management and fisheries as the primary
reasons. He noted that he had appointed a committee to study if and
how Iceland's interests could be protected as members of the
European Union, and said it was ridiculous to claim that the EU
membership issue was not being discussed by his government. He
closed the speech by saying the economy is going through temporary
problems caused by foreign circumstances over which Iceland has
little control. He said Iceland's good living standards and
valuable resources will lead the country "out of today's turmoil and
provide a path to a better future."
KLOPFENSTEIN
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