EU’s Rehn Offers Iceland Help to Lift Capital Controls
Olli Rehn, the European Union’s economic and monetary affairs commissioner, said the bloc is ready to offer Iceland technical assistance to get rid of capital controls.
“It’s very important that the government of Iceland is now preparing a strategy for lifting the capital controls and linking it to its European perspective,” Rehn said after a meeting with Arni Pall Arnason, Iceland’s minister of economic affairs, in Brussels today. “We are ready to provide technical assistance for this work and these objectives.”
Iceland is seeking membership of the EU as part of its response to the biggest financial crisis since the Great Depression. The country’s government said on Feb. 4 that it had submitted a pre-accession economic program to the European Commission, the 27-nation executive arm, as part of its work to prepare for membership of the bloc.
Iceland’s central bank is preparing to scale back capital controls that have protected the krona for more than two years. The controls, imposed after the failure of the nation’s three biggest banks in October 2008, have shielded the currency from a sell-off and allowed the island’s trade surplus to support the exchange rate.
“It’s no easy task to lift the capital controls and we need all advice and all help that we can get,” Arnason said at a press briefing with Rehn. “It’s important for us to seek to ensure that the negative effects of lifting the capital controls are as little as possible.”
To contact the reporters on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net
To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net
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