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Viewing cable 08REYKJAVIK66, ICELANDIC PRIME MINISTER TO BUSINESS COMMUNITY: STAY THE

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Reference ID Created Released Classification Origin
08REYKJAVIK66 2008-04-18 18:11 2011-01-13 05:37 UNCLASSIFIED Embassy Reykjavik
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