European Commissioner for Enlargement and Neighbourhood Policy
Address to AFET Committee
Strasbourg, 08 March 2010
Mr. President, Honourable Members of the European Parliament,
It is my pleasure to be here with you to present the Commission's recommendation to open accession negotiations with Iceland. I am pleased that we have taken such an important step at the beginning of my mandate.
In the spirit of close cooperation between the Commission and the Parliament, I have come here today to inform you about the content of our opinion and to discuss issues of particular interest to you.
I would like to start out by sharing with you the analysis that led us to recommend the opening of accession negotiations with the country. I will then also touch upon the next steps in the Icelandic membership process and the implications of this decision for the EU and its enlargement policy.
But let me first briefly mention the referendum held in Iceland this Saturday, 6 March, which lead to rejection of the amendment - tabled in December 2009 - to the Icesave legislation of August 2009. The Commission takes note of the results of the referendum. This is a matter for the people of Iceland to decide.
Let me stress that I greatly appreciate the efforts and indeed the commitment, which is unaffected by the results of the referendum, of all parties involved to try and find an agreement on the terms and conditions for the repayment of the loans under the Icesave agreement.
The agreement itself is an important, albeit bilateral, issue between Iceland and two Member States. As such, the results of the referendum are quite distinct from Iceland's accession process.
But at the same time, the Commission's opinion refers to the Icesave issue from the viewpoint of the capacity to apply the acquis upon accession. Iceland's compliance with the European Economic Area Agreement is evaluated by the EFTA Surveillance Authority. Whenever available we have made references to their assessment, and it is this Authority that needs to pronounce itself on any infringements of the relevant acquis.
Our assessment can only be an initial picture at this stage. Detailed assessment will only come at a later stage of the process, through screening, once accession negotiations will have been opened. We will also take any further assessments from the EFTA Surveillance Authority on Iceland's compliance with the European Economic Area Agreement into account.
Now, let me return to the opinion. It is the comprehensive outcome of intensive work over the last few months, building on a large number of information sources.
We assessed carefully the extent to which Iceland meets the criteria for joining the European Union set by the Copenhagen European Council in 1993. Our analysis is based on Icelandic answers to our questionnaire, combined with information from international institutions (IMF, World Bank) and non-governmental organisations, as well as reporting by EU Member States and Members of the European Parliament.
Let me give you a short overview of our findings.
In terms of political criteria, Iceland is a functioning democracy with strong institutions and effective division of powers. Its constitutional and legal order and governing institutions are stable. The rule of law and respect for human rights are guaranteed. This led us to conclude that Iceland meets the political criteria, established by the December 1993 Copenhagen European Council, the key precondition for a positive recommendation to open accession negotiations with an applicant country.
That said, we also found some shortfalls. The authorities need to make further efforts to strengthen the independence of judiciary, especially the procedure for judicial appointments.
Some issues also emerged during the economic crisis related to potential conflict of interests, in a country where corruption had previously never seriously been considered as an issue. In this context, we also recommend that mechanisms to avoid conflicts of interest be strengthened where appropriate.
The Icelandic government is well aware of these issues and is already taking first steps to address them. The Icelandic population has taken a keen interest and is eagerly awaiting the report of the parliamentary special investigative commission.
Looking now at the economic criteria, the last two years have been challenging for the country. The functioning of the markets has been seriously affected by macroeconomic imbalances. Existing structural weaknesses were exposed by the global economic and financial crisis.
The banking system collapsed in October 2008 leading to significant economic contraction and creating considerable hardship for the Icelandic people. The emergency measures the government took are beginning to bear fruits but much effort and many reforms are still needed.
Despite the difficult economic situation following the financial and economic crisis, Iceland can be considered a functioning market economy. As an EEA member, despite some shortfalls that will have to be addressed at an early stage, it has already proved able to withstand competitive pressures and market forces within the EU. Iceland should be able to withstand such pressures again in the medium term provided the necessary macro-economic and fiscal measures are duly implemented.
In conclusion, we can say that the fundamentals are there. Our political message to Iceland is now to firmly implement a credible fiscal strategy and address current weaknesses by implementing appropriate macroeconomic policies.
If we now move to Iceland's ability to take on the obligations of membership taking over and implementing EU rules and regulations - Iceland is well positioned in comparison with many other applicant countries due to its membership in the European Economic Area since 1994.
Indeed, despite some shortfalls that will have to be addressed at an early stage, Iceland has a generally satisfactory track record in implementing its obligations under the EEA.
Further efforts are needed in some areas, such as alignment with the EU Services Directive or the Third Postal Directive. Iceland will also have to comply fully with the freedom of capital requirements and gradually eliminate existing restrictions.
Of course more substantial efforts will be needed to align with the acquis in areas that are not covered by the EEA Agreement, most notably in agriculture and rural development, fisheries and the environment.
If we look at agriculture and rural development, Iceland will, for instance, have to set up the administrative structures required by the Common Agricultural Policy. This will take time and effort. And, as was the case in previous enlargements, we cannot exclude some heated political debates over the support measures available for Icelandic farmers after accession.
Fisheries and the environment are other sensitive areas. Fishing is a traditional profession in Iceland. Reaching a consensus in these fields will most probably not be easy, but I am convinced we will be able to work together and find a solution.
Turning now to an essential element of the renewed consensus on enlargement of 2006, namely our integration capacity, Iceland is a small country already well integrated into the internal market. On these grounds, we consider that Iceland's accession would have a limited overall impact on EU policies.
At the same time, Iceland's accession would be highly beneficial for the EU in many respects. Icelandic membership would contribute to strengthening the Union's role in advocating human rights and democratic values globally. Thanks to its strategic geographic location Iceland would, as EU member, strengthen the Union's strategic positioning in the North Atlantic area. Iceland also has considerable experience in the fields of renewable energy technologies, the protection of the environment and combating climate change. These are fields where climate-conscious Iceland can contribute substantially to the development and implementation of EU policies.
Let me now turn briefly to the future and the next steps in Iceland's membership process.
Now that the Commission has delivered its Opinion, it is up to the European Council, on the basis of our recommendation, to decide on the opening of accession negotiations. I hope that the negotiations with Iceland will start soon. Once the negotiations are under way, I will make a point of ensuring that the Parliament is kept fully in the picture.
Co-operation with the Icelandic authorities has been very smooth so far. There will, however, be no fast-track procedure, no shortcut to EU membership. The criteria that need to be fulfilled are the same for all applicant countries based on the "own merits" principle.
The decision of the Commission to recommend the start of negotiations with Iceland has to be read as a clear message of hope. The EU is ready to take on board countries which are not only fully committed to work hard, but which will be able to make their contribution to a more secure, more democratic, and more prosperous Union.
Dear chairman, honourable Members,
I am aware that our meeting today is dedicated to the Commission's opinion on Iceland. But I would like to at least very briefly inform you about some visits and talks I recently had.
In the first week after your house approved the Commission, I went to Zagreb and Skopje.
My message to the Croatian authorities was clear: Your wish to finalize negotiations in 2010 could become reality, but it will be hard work for you and you may not loose any time from now on. This is in particular important for chapter 23 where Croatia has to build up a track record of reforms within the next few months.
The Croatian government and the newly elected President are well aware of the urgency and there reply was that they are willing to turn words into deeds.
As regards, my visit to Skopje, all key politicians there are focussed on the name issue. Following the contacts of the two Prime Ministers and the recent visit of Mr Nimetz to Skopje and Athens, there is now a window of opportunity to solve this issue.
And I think it is very helpful that your colleagues from the Joint Parliament Committee and the delegation of this Committee who also visited Skopje during this week are passing the same message.
I have also attended the inauguration of the new President in Kyiv. Ukraine is a key partner for the EU. We are in the process of developing new working relations with the President and will have to do the same with the new government once it is established. During the meetings in Kyiv and again last Monday in Brussels, the Commission conveyed two messages to President Yanukovych.
The first was that Ukraine needs to undertake decisive action on reform.
The second was that the EU would provide tangible and practical support to Ukraine in implementing them.
Four areas of priority have emerged:
getting Ukraine back on track with IMF which is a pre-condition for macro-financial assistance;
reforming the gas sector with a view to inclusion in the Energy Community;
addressing gaps in the migration control system in order to progress towards a roadmap for a visa free regime in due course;
and approximate trade related legislation to conclude the Association Agreement, including DCFTA.
You are also aware of the difficult situation in Belarus. It is of upmost importance not to come back to the isolation period we have behind us. Dialogue should be kept open with the authorities.
At the same time, respect for human rights in the spirit of Prague Declaration is a non-negotiable precondition.
I have met with both the Minister of Foreign Affairs Martynov as well as the opposition leader Mr Milinkievich and the chairwoman of the Union of Poles Ms Borys and I am convinced ways forward are within reach.
And finally I attended the Inauguration of the Secretariat of the Union for the Mediterranean in Barcelona and the EU-Marocco Summit in Granada in the past few days.
Both the Eastern and the Southern part of our neighbourhood will get my full attention in close cooperation and agreement with the High Representative and Vice-President Ms Ashton.