Iceland Success Story Shows Joining EU Not Needed, Grimsson Says

Iceland’s revival from its financial collapse and the prosperity of nations outside the European Union show that membership in the bloc isn’t needed to achieve economic success, President Olafur R. Grimsson said.

“There are a few countries in the world which have succeeded the way Switzerland has,” he said today in an interview in Davos, Switzerland. “And then look at Norway and my country, Iceland, which has recovered from a financial crisis more effectively than Europe. So it’s difficult to argue the case that you have to be in the EU to be successful.”

The debate on the cohesion of the 27-nation bloc is intensifying as U.K. Prime Minister David Cameron today pledged a referendum by the end of 2017 on whether to leave the EU. Iceland earlier this month announced it would freeze talks underway since 2010 to join the bloc amid voter skepticism.

As the EU battles to rescue the 17-nation euro region from the debt crisis, Iceland has recovered from its financial collapse in 2008, leading the country’s 320,000 citizens to question the logic of joining.

Iceland was plunged into its worst recession in six decades in 2008 when the failure of its three biggest banks caused its currency to decline as much as 80 percent against the euro offshore.

Cameron today said U.K. backing for the status quo in Europe was “wafer thin” and said he would put the question to a popular vote, if re-elected in two years, after also negotiating a return of some powers to the U.K. He said he wants the U.K. to remain in the EU.

“There is widespread euro-skepticism in the U.K. about the EU,” Grimsson said. “The speech is simply reflecting a deep and profound political reality within the U.K.”

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net.

To contact the editor responsible for this story: Jonas Bergman at jbergman@bloomberg.net.

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