EUROPEAN MANAGEMENT PROGRAMME

Iceland: From Heaven to a Freezing Hell... Lessons from the used-to-be Viking Tiger.

CLEMENTZ Jonathan, DEVINEAU Jean Damien, VENEGAS Karla 6/15/2011

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Abstract
Iceland was well-known for its fast economic growth. But how did the 2008 economic crisis affect the Viking Tiger? What were the mistakes made and how is Iceland reacting nowadays towards the new challenges? An economic reason for the crisis is the weak business culture. It resulted in high risk decisions, ending in high debts and economic recession. In addition, the lack of financial knowledge from the consumers caused bubble asset inflation that impacted the overheating of the economy, increasing the exchange rate and the trade deficit of Iceland. The political lessons can be extracted from the continual disagreements from different political actors. The political parties, the president, the prime minister, and the citizens: everyone fights for its own interests and for what each individual considers to be better for the country. Still, civil liberties remain wellestablished and the institutions work correctly. The fishing industry lesson permits to realize the mistake caused by the privatization of the sector and the ITQ system. Hence, new challenges are presented such as: the establishment of a new fishery management system, the Cap-Rent-Recycle; and the transitions made in its policies in order to enter to the EU. The aluminum industry lesson establishes that, although the expansion of the aluminum industry appears to have a positive influence on stability and economic growth, it would face opposition from environmental movements. The environmental and energy lesson elaborates on the high importance of Icelandic renewable energy production and the increase of tourism-caused pollution. Finally, regarding the technology industry lesson, the R&D in the technological sector positioned Iceland as one of the most technological advanced countries in the world. However, the small market size and the limited budget after the crisis have negative effects in this area.

Contents
Contents..............................................................................................................4

Figure 1: Total external debt..............................................................................13 Figure 2: Consumer price index.........................................................................14 Figure 3: General intrest on non-indexed loans..................................................15 Figure 4: Unemployement..................................................................................16 Figure 5: GDP 1980-2010...................................................................................16 Figure 6: GDP 2008, comparison........................................................................18 Figure 7: Inflation 2008, Comparison.................................................................19 Figure 8: forecast of GDP and Inflation until 2016..............................................20 Figure 9: GDP by industries................................................................................20 Figure 10: GDP by industries, from 1980 to 2010...............................................21 Figure 11: EPI rating (detail in appendix 2)........................................................37 Figure 12: CO2 emissions, comparison...............................................................37 Figure 13: Annual generation of energy.............................................................38 Figure 14: energy installed capacity..................................................................39 Figure 15: Total man-made emissions without carbon sequestration.................40 Figure 16: GHG emissions by industries.............................................................41 Figure 17: Emission of carbon dioxyde by source...............................................42

its industry (fish and aluminum).202) 65 years and over: 12..034) 15-64 years: 67.Iceland From Heaven to a Freezing Hell. northwest of the United Kingdom.058 (July 2011 est.) 93% of total population (2010) . These characteristics are: its economy. lessons from the used-tobe Viking Tiger The main objective of the present report is to explain the evolution of the Icelandic economic growth. and its technology/R&D. amended many times Area: Coast line: Population: Age structure: Urban population: 103000 sq km near 5000km 311. The project also tries to highlight the decisions that led to the 2008 economic crisis.541/female 103. island between the Greenland Sea and the North Atlantic Ocean.) 198000 in Reykjavik 0-14 years: 20. the focus has been made on five aspects which are considered to be determinant for Iceland’s development and failure. Constitution.2% (male 31. its political system.7% (male 17. its environment.1% (male 105.974/female 21.929/female 31. The conclusions present the main lessons that can be learned from Iceland. Situation of Iceland and some figures Northern Europe. In order to succeed.378) (2011 est. 16 June 1944. effective 17 June 1944..

Life expectancy: 80.9 years .

Iceland submitted its candidature. Later on he refused to sign the agreement plan to pay the UK and the Netherlands. Its policies strongly support the private sector of the country. Joining the European Union (EU) is seen as a mean to help the country to overcome its economic difficulties. The results were negative.. The last referendum was held in April 2011. Iceland’s current strengths in the political arena are: policies supporting privatization in order to foster economic growth. The president called three times for a referendum.is 2011):  Political The government of Iceland has a high economic focus. but foreign savers lost all their money. The current strengths of the economy arena are the improvement of the international investment position and the strong services sector.9 % of the country’s GDP in 2010. The current political challenges consist in the opposition of the Icelandic citizens to the payment of the debt (affecting diplomatic and political relations with the United Kingdom (UK) and the Netherlands) and other aspects caused by the banking crisis. The government’s challenges were to achieve an economic recovery and a global growth. This one leads the economy and contributes to 67. In addition. In October 2008. The current president. It went through an economic recession in 2009 and 2010 but recovery is expected this year. in July 2009. A future risk reside in the lack of a political alternative. Official talks towards accession started in July 2010 but the government is showing inabilities to convince its citizens. Iceland foreign debt rose up to 850% of GDP in 2009. a PESTEL Analysis is offered (Datamonitor 2011. the three main banks collapsed and Iceland was able to compensate its national savers. is holding power since 1996. statice.  Economical The services sector is a key element of the Icelandic’s economy. In the late .PESTEL In order to acquire an overall perspective of the current situation of Iceland. therefore the uncertainty of the delay of an economic recovery increased. the US and the NATO member states). (outsourced public services such as water supply and healthcare services to private parties) and strong defense relations (close ties with the Nordic. He has been reelected three times due to the fact that no other candidate indented to run for the job. Olafur Ragnar Grimsson.

the start of pension periods as well as the payment of old age pensions and the right to participate in transactions in organized debt markets with securities.1990s. the privatization of commercial banks and the opening to the international capital market resulted in high foreign investments. the declining revenues of pension funds is creating a long term challenge for the government. The current economic challenge is the high external debt.  Technological The highly skilled population is an important asset of the country’s Research and Development sector. posing a great financial risk to the government. The financial institutions debts represent 76% of the total amount of debt. In comparison the average rate equals 5. The objective was to introduce a higher degree of flexibility into the Icelandic pension funds in relation to: flexibility in the transfer of pension rights.  Social The Icelandic society can be characterized by strong healthcare and pension system. Those actions consist in emergency laws that allow the government to take control over banks and to make them take loans from foreign banks. a court ruling in June 2010 stated that several loans given in foreign currencies were illegal.4% in 20111. The inflation rate is expected to decrease further by 2013 (around 1. The government has introduced measures to beat the crisis. In addition. a big improvement due to the fact that it amounted for more than 12% in 2009. The expenditures on science and technology in Iceland have considerably increased since 2000. In addition. the high fragmentation of the research activities is slowing down the country’s process of innovation. the standards of teaching are decreasing.  Environmental 1 Figures of May 2011 . Additionally.0%. there are strong uncertainties related to the banking sector.7. inflation decreased by 3.53% in 2010 and under 2% before the crisis). It has been reported that teachers spend a small percentage of time on teaching and learning. The vast majority of health institutions are public. causing concerns in the educational sector.9%). International co-operation have been set up. However. Iceland has the highest proportion of people involved in R&D in the world. teacher absenteeism is massive (24% of teachers attend classes). As future risks. In 2009. a bill amending the Pensions Act was passed. Moreover. Another future risk is the increasing of unemployment (9. This could threat the country's economic recovery.03% of GDP in 2009 close to the OECD average of 9. Moreover. just after Finland (13 researchers per 1. Healthcare spending in Iceland accounted for 9.000 inhabitants).

This aims to enable transparency of trade and transfers between these countries. Only Switzerland (13%). the Icelandic forest reserves are very limited. The Eyjafjallajokull volcano erupted in April 2010 causing a great environmental damage. After this eruption. But on May 22nd 2011. It has one of the lowest levels of pollution and emissions of greenhouse gases.This enables more capital gains and dividends for foreign investors as well as the inflow of FDI.  Legal The principal strengths of the legal system are: the low level of corporate tax and the new international tax agreement. However. . St Vincent and Grenadines.Iceland is considered to be the cleanest countries in Europe. 2 3 Effective since January 1. making it one of the country with lowest corporate income tax rates within the OECD3. Iceland also faces some risks regarding the weak enforcing of the law.4m metric tons. The ash dust from the volcano causes a stop in air traffic in northern Europe. there has been much speculation about an eruption of another larger volcanic. The rapid expansion of tourism in Iceland caused the increase of waste. 2011. new policies were set to reduce the effect of agricultural activity on the environment. Iceland is characterized by the good quality of its air and water.5%) and Hungary (16%) have a more competitive corporate income tax in the entire Europe. Saint Kitts and Nevis. The CO2 emissions were reduced between 2008 and 2009 from 3. Katla.5m metric tons to 3. In addition. a new volcanic eruption (Grimsvoetn) occurred threatening the air traffic once again. Caribbean and Monaco. Ireland (12. Iceland has a low corporate income tax of 20%2. the effects of the tourism industry are slowly impacting the environment (increased wastage and pollution). Still. which threaten the environment. Furthermore. The country made several tax information exchange agreements with countries such as: San Marino. It has been estimated that around 95% of the original forest has been completelycut down. The climate change is affecting the fishing industry. However. current challenges are the restrictions on FDI and a weak enforcement law that have limited the effectiveness of the system.

revenues more than tripled again to an estimated 33 billion kronas in 2007 (U. as the corporate-tax rate fell gradually from 45% to 18%.1 billion kronas from just above 3 billion kronas (U. Before the 2008 the sector was highly concentrated within one commercial bank. the government took over many banks in October 2008. 2010). million). After the crisis.php?Article_ID=14288 "Iceland's Laffer Curve. Only after the economy opened up. the UK and the Netherlands are in fact in direct conflict with Iceland concerning reimbursements of loans. Since 2001. 2007 .S. the government had to intervene and take control of many banks in October 2008. due to global liquidity and external dependence. Icelandic economy was heavily based on its banking sector. tax revenues tripled to 9. Since Iceland is a small country. After the crisis. from 33% in 1995 to a flat rate of 22. says the Wall Street Journal. which represented more than 40% of the activity and three the saving companies accounting for 60% of the all banking sector. • • Before the 2008 financial crisis. March 8. the banking sector is highly established in term of number of institutions. Nevertheless. The three major banks saw their assets value rise to 100% of Iceland’s GDP in 2004 and up to 920% in 2007 (IMF. its economy is restricted.ncpa.5. The IMF promised $2. In the article “Iceland Laffer Curve” from the Wall Street Journal4 we can read that “The rags-to-riches story of how Iceland's 300.Icelandic Economy: how it gets to the crisis?  Overview of the Icelandic Economy The Icelandic economy went in the same decade from fast growths to one of the biggest crisis in European history. The largest commercial 4 http://www. $44.000 citizens became some of the world's wealthiest people is a testament to capitalism's animal spirits”.1 billion to save the economy but due to the intervention of the UK and Netherland’s governments $1 billion remains to be paid." Wall Street Journal. Kaupthing Bank.S.org/sub/dpd/index. privatized state companies and slashed marginal taxes did this once famine-plagued island become a Nordic Tiger.75% in 2007. $490 million). The 3 steps to become a Nordic Tiger: • From 1991 to 2001. As explained in the following paragraphs. Personal income-tax rates were cut gradually as well.

Dutch banks also took a big hit during the crisis with the bankruptcy of the internet based bank: Icesave. At that time. For this reason. the Icelandic Central Bank’s reserves of currency was really low compared to what it was supporting especially concerning foreign devices. At that time. other banks have to share the cost of compensating Dutch customers for part of their lost deposits. the Icelandic population denied that action through referendums (see section Payment of international debt). Nevertheless. in case of a bankruptcy.  The chronology of the banking system that led to the October 2008 crisis First it is important to understand the process that led the country from a government owned bank system to a privatized one. Thanks to that development. and then to the 2008 economic crisis. they were just serving the economy with the basics. Assets were being re-evaluated at higher prices and companies were able to make profits. there are 4 commercial banks. This led to a remarkable growth. Later on. 23 saving companies and a state owned company. Kaupthing Bank and Landsbanki. Despite a high activity from the banking sector and particularly from activities abroad. The bankruptcy caused important losses for some banks. despite the Icelandic Central Bank and a financial supervisory. This is because the crisis changed the rules. they had to borrow from abroad: sale of bonds and interbank loans.banks. institutions changed their strategies going from safe to risky. This caused both governments to halt the loans given by the IMF at 50% of what was promised (Datamonitor 2010). In a short period of time they were able to raise billions of . Icelandic banks used their branches or subsidiaries in Europe. Despite success. when Iceland joined the European Economic Area (EEA). However this profit did not come from operational success but speculation or also called bubble induced profits. No risks were taken. Before the early 90s. the entire country benefited of it. The Icelandic government declared at that time that it would repay the Netherlands and UK 20 % of the amount due. with the opening of the financial sector to the world and the privatization of banks. Under the Dutch law. the banking sector was not very well developed. In order to attract new liquidities. In order to finance this expansion. suspicions were raised mainly thanks to two reasons: 1. were nationalized. Nowadays. 2. Suspicion came from experts that noticed the evaluation of assets that were considered as not reflecting the reality. commercial banks expand at a very fast pace in Europe. Dutch banks paid $271 million. the government also suspended during 4 days all trades in the Reykjavik Stock Exchange. The banks used to be to a large extent government owned and somewhat politicized.

This led to a slip of many indicators: exchange rate.edu 2011). during the period 2006-2008.Euros that way. the economy contracted and the country was forced to seek financial help from the IMF. governments or international financial institutions. stock market started to slide.com . After the 2008 banking crisis. especially considering the fact that Iceland is a small country. With the existence of a high asset bubble economy and no back up from the government possible. the external debt was high (between $8 and $9 billions). But the Icelandic government could insure such important amounts of deposit. www. Figure 1: Total external debt  5 Foreign investments The external debt is the portion of a country's debt that was borrowed from foreign lenders including commercial banks. asset prices (including real estate) and later on after 14 months of sliding the collapse of the entire banking system in October 2008 (Yale.investopedia. Some economic elements are relevant to clarify the situation:  External Debt5 As shown in the following graphic.

is/?pageid=194 7 The CPI or Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services. those companies hope to get further resources.investorwords. 2011. 6 http://www. FDI fell from $38. It was introduces in 1999 by the New Zealand Reserve Bank. The CPI in Iceland has constantly progressed in the past couple years. In order to fight inflation and to assure price stability. electricity. The CPI is published monthly.com Figure 2: Consumer price index . It is reviewed eight times per year.Due to its geographical and economic situation. Standard & Poor's Ratings Services (2011) placed the 'BBB-/A-3' foreign currency and 'BBB/A-3' local currency sovereign credit ratings on Iceland on CreditWatch with negative implications. food. and also by transportation and fisheries companies. and transportation.6  Key monetary indicators The inflation and the interest rates are two major indicators that tend to have a real impact on the currency evolution. including housing. o CPI7 inflation The CPI or Consumer Price Index is an inflationary indicator that measures the change in the cost of a fixed basket of products and services. efficiency and markets. Icelandic companies have invested in foreign fisheries companies. www.sedlabanki.  Credit rating On April 13. Due to the crisis. FDI in Iceland is usually made by seafood sales and marketing companies. On the other hand.  Monetary situation The Official Cash Rate (OCR) is the interest rate set by the Reserve Bank to meet the inflation target specified in the Policy Targets Agreement. electricity. after the Icelandic electorate rejects Icesave Agreement a second time. That way.4 billion in 2007 to 1. on May 23rd 2011. The CPI is published monthly. food. After a meeting. including housing.45 billion in 2008 and even further in 2009 to $86 million. and transportation. the Central Bank of Iceland implements monetary policy by setting the OCR. the Central Bank of Iceland offered to purchase Icelandic krónur against cash payment in foreign currency.

unions have agreed to lower the workers’ wages hoping that it will contribute to job openings. in comparison it was pretty close to the French one. This is mainly due to the fact that it is such a small economy.5% (CIA . Between 2002 and 2009. the key rate has been cut from 4.5% to 4. Iceland’s inhabitants in 2010 can purchase fewer products that they could buy in 2003. In 2010 the unemployment reached 9.Inflation has always been an important problem for Iceland. Reference to the graphs 4 . inflation has run high. By lowering its interest rates. o Interest rate In February 2011. the inflation was estimated at 5. Iceland is hoping to stimulate its economy and attract investors once again.6% in January 2009). In 2010. The financial meltdown altered everything. In 2003.5% (with a much higher rate for youngsters between 16 and 24 years old).2011). To fight this very high rate. Figure 3: General intrest on non-indexed loans  Employment Before the crisis in 2008. the Icelandic jobless rate was one of the lowest in Europe: below 2%. Therefore the impact on the population is important: with the same amount of money.25%.1% and in 2009 it reached 12% (it even peaked at 18. This action made by the Central Bank of Iceland was aimed to pursue the monetary easing post crisis. the rate of inflation amounted 2.

After 1993 the economy recovered due to the initiation of economic reforms base on market liberation.Figure 4: Unemployement  GDP’s Analysis Figure 5: GDP 1980-2010 The Iceland economy is basically capitalistic. The fall in fish export was the major reason of that. it has historically been known to be a country with an extensive welfare system and remarkably even distribution of income. Iceland suffered from a sharp recession between 1988 and 1993. still. Between 1996 and . The graph 4 show the evolution of Iceland’s GDP from 1980 until 2010.

4%. Iceland's economy plunged into its worst-ever crisis in 2008–09 following the implosion of its banking system in 2008 and has only begun to inch out of recession. Iceland’s economy grew by 2. www. there was a slowdown with a GDP growth of 0. the country’s economic growth drop in 2008.3% over the year.2001. In 2002. the economy growth remained stable. Due to global economic crisis and the turmoil in the banking sector. a Reykjavik University finance professor.11% annually.is 2011).5%. In 2003. The economy contracted by over 6.1%.7% annually.7%. this is due to the fact that further liberalization of foreign investment policies by the government key investments was made in electricity generation projects. As we notice on the graphs 6 in 2008 Iceland has the most important inflation rate in 2008.statice. In 2005. at 7.8% in 2009 and has contracted by 3. With the slowdown in European markets in 2006. This is the result of: • • Privatization The government’s substantial efforts to elevate the financial sector In the same period the amount of foreign investment increased while exports of fish products remained healthy (Datamonitor 2010. This rise in growth was the result of structural reforms concerning the financial market liberalization and unleashed privatization. the growth rate fell to 4. the economy recorded healthy growth rates averaging 4. said. This contraction was due to a high private sector debt which caused net external liabilities to increase to 80% of the GDP and the gross external debt to rise to 130% of the GDP. . it the growth is also because of private consumption and efficient utilization of resources. In 2004 GDP growth rise to 7.6%. due to the crisis. But its GDP remain good compared to OECD GDP average. Except for the year 2002 Economic growth has remained relatively robust during the post-cold war period spreading from 1993 to 2007 with an average GDP growth around 4. In addition. This was the end of the Nordic Tiger period as Oddgeir Ottesen. "It's a kitten" (Richburg 2008).

comparison .Figure 6: GDP 2008.

The graphics 8 present a forecast (statice.1%.9%. Comparison The Gross Domestic Product (GDP) decreased by 6.9% in 2009. .is 2011) of the country’s possible recovery.4% while imports declined by 24. In 2010 the GDP growth is better than in 2009 with 3. 2011. A positive GDP growth and inflation at the world average level are predicted to start the present year.7% o Fixed capital formation by 50.9% decline in domestic expenditure. o Household final consumption decreased by 16% o Government final consumption decreased by 1.Figure 7: Inflation 2008.5% and planned to go back to a positive. This is due to: o A 20. o Exports grew by 7.

(all data are detailed in appendix 1) Figure 9: GDP by industries . the behavior of the industry (including energy) proportion decrease during its prosperous period.Figure 8: forecast of GDP and Inflation until 2016  Gross Domestic Product by industries The graphs 9 present the increase of the financial sector and the service activities over the past thirty years while agriculture and fishing proportion decreased. 5 & 6 on the graphs). It dominates the economy and contributes to more than 68% of the country's GDP in 2010 against 56% in 1980. Overall the major sub-sector of the services industry during the last 30 years is “financial services”. The construction sector remains stable until 2003 where it follows the growth and drop due to the crisis. that could be explain by the consumption and financial behavior over the same period. The coalition government is undertaking further measures to make sure that this sector strongly continues to contribute to the economy by leveraging the benefits of the ongoing liberalization process. Also. The first major contributor to GDP is the services sector (4.

ferrosilicon production and manufacturing8. dairy products and fish9.The second major contributor to GDP is the industrial sector. Finally agriculture is the third major sector. most of which are as yet untapped. green vegetables. The main agricultural products of Iceland are potatoes. Iceland has substantial geothermal and hydropower resources. Within the industrial sector. from 1980 to 2010 8 9 Datamonitor Datamonitor . fish processing. the major sub-sectors are aluminum smelting. According to government sources (Datamonitor – 2011). Figure 10: GDP by industries. mutton. The government also intends to augment foreign investments in the energy sector.

in late January 2009. the political landscape had been dominated by the Independence Party (Michalon 2010). from the Independence Party (IP: center-conservative) had to resign. Though. The new coalition managed to agree on an economic program with the IMF. 2009 (EIU 2011b). “well below the level of 50% recorded at the start of the year and 61% after the coalition took office in May 2009” (EIU 2011a). Even if next elections are expected to be held in April 2013. Hence the financial collapse and its subsequent consequences have caused a decline in confidence in political parties. an early vote could occur due to the limited support for the government. At this moment. this new coalition (SDA and LGM) was divided and faced strong opposition from the Independence Party (IP) and the Progressive Party (PP) (EIU 2011d). Nonetheless. As the Gallup poll results show. This disillusion has been proven by the election of a political comedian Jon Gnarr as the mayor of Reykjavik in May 2010 (EIU 2011c). and divisions within the LGM. the support for the government felt to 26%10 as Icelandic society faced widespread protests and riots (EIU 2011a). 10 Gallup poll . the President of Iceland Ólafur Grímsson asked the leaders of the Social Democratic Alliance (SDA: center-left) and the Left-Green Movement (LGM: left) to form a coalition to govern until the holding of early elections on April 25. the decline affected directly the Independence Party (IP). all four major political parties have to compete against the general public disillusion with the political system. As a result of this event. Nevertheless. which was crucial for the economic recovery. the support for the present government increased 36% in November 2010. which holds the actual government and deals with the crisis.Political System: Reaction towards the crisis?  Overview of the political arena The economic crisis caused collateral victims in the political arena: Prime Minister Geir Haarde. confidence in the SDA and LGM has also fallen during 2010 due to severity measures that the coalition needed to introduce. its weakness in managing negotiations with the UK and the Netherlands on reimbursement for Icesave deposits. The IP could emerge as the largest party (only 16% are satisfied with the opposition) (EIU 2011a). These elections represented an opportunity for a political shift: since 1991. due to the inability of his government to overcome the challenges posed by the crisis. “which almost brought down the government at the end of 2010”(EIU 2011b). At the beginning.

The purpose of the loan is repaid to the British and Dutch compensation and granted to their citizens who have savings accounts in the subsidiary Icesave Landsbanki Online. Ingibjorg Solrun Gisladottir. On three occasions the Althingi tried to pass a bill on accepting the Icesave Law12 . a quarter of the electorate (Baigorri Argitaletxea 2011). If the Althingi votes to make the ministers accountable before the special constitutional court11. UK and the Netherland will take legal action at the EFTA Surveillance Authority (EIU 2011c). However at the end the vote passed only by one vote. sent a letter to the ESA in early May stating that “it 11 12 Secretary of the Treasury to issue a state guarantee on loans of EUR 3 900 million granted by Governments in the UK and the Netherlands to the Guarantee Fund for Depositors and Investors Iceland. On the other side. the Althingi (Parliament) is presently debating on a resolution to establish criminal charges against ministers of the former government for gross misconduct by not reacting to the possible threats from the oversized banking sector (EIU 2011d).In addition to this political disappointment. Johanna Sigurdardottir (SDA). on behalf of the States . the members of the LGM in parliament criticized and voted against the budget. In December 2009. those accused from the SDA are the minister of foreign affairs. The Ministry of Agriculture and Fisheries and the Ministry of Industry will merge into a new Ministry of Industry (EIU 2011a). the president once again put it to a referendum and the Icesave bill for the loan deal was again rejected in April. Consequently. is needed to be passed and approved by the president in order to reimburse those countries.  Payment of international debt: Political reactions The collapse of the three major commercial banks of Iceland has had important repercussions on the diplomatic relations with UK and the Netherlands. the Icesave bill. The Icelandic Minister for Economic Affairs. and the minister of business affairs. Grimsson stated that the reason of his decision was that “now the people have the power and the responsibility in their hands… Many Icelanders question why taxpayers should reimburse private investors who lost money in the collapse of a private bank” (Vogel 2010). Arni Mathiesen. Árni Páll Árnason. and the minister of finance. Bjorgvin Sigurdsson (EIU 2011d). is committed to make deep changes to the government as she wants to reduce the number of ministries to nine in 2011 regardless of the opposition from some members of the LGM. the Prime Minister. Polls also indicated that around 70% of the population was opposed the deal (Vogel 2010). The first one occurred in August 2009. The former ministers from the IP accused are: the prime minister. Another point to highlight is the disagreement on the government's 2011 budget. a third revised agreement with less strict terms for Iceland was ratified by parliament (44 votes to 16) in February 2011. Which has existed legally since 1905 but never been used The "Law Icesave" authorizes the Icelandic Minister of Finance. This referendum was rejected in March 2010. Nevertheless. Furthermore. but the president refused to sign it in January 2010 at the request of a popular initiative supported by over 56.000 people. Hence the bill was put to a popular referendum. it will cause a great damage and tension on the political system and more specifically to the SDA and the LGM (current holders of the office) (Oxford Analytica 2010). The second time was in December 2009. Finally. Geir Haarde. An agreement.

it can be considered as the main responsible for this radical change in the Icelandic perspective towards the EU. A special commission was created to investigate and to prosecute alleged crimes related to the banking collapse. Mechanisms to strengthen and reduced the scope of conflicts of interest have been improved. Economic Criteria 13 Whose unicameral Parliament. called Althingi. It respects the separation of executive. Political Criteria Iceland is a functioning democracy with strong institutions.looks as if the Landsbanki bankruptcy estate will be able to cover the vast majority of deposit claims” (Iceland Review 2011a). Afterwards. The economic crisis that hit the economy in 2008 caused the conversion of Iceland into an official candidate for EU entry.000 million or it would go to court (Pérez 2011). The 9th of June 2011. Since the crisis highlighted the benefits of membership and minimize the costs. 2. the European Council will decide if Iceland is accepted or not. the European Commission sent an exhaustive questioner to evaluate the country and submit its candidacy. Iceland has been very little attracted by the European Union. to make all deposits priority claims to Landsbanki’s bankruptcy estate with the establishment of the emergency law in October 2008” (Iceland Review 2011a). Following the financial crisis certain issues have been raised concerning potential conflicts of interest in public life (Such as the Icelandic close links between politicians and the corporate sector). legislative and judicial with stable checks and balances. Iceland presented its candidature to the EU on July 17th 2009. . It has legal and constitutional institutions and a stable government. An analysis of Iceland accomplishment with the EU accession criteria permits to evaluate the capability that Iceland has to being accepted as a candidate. Iceland has a comprehensive system of safeguarding the fundamental rights. is presented frequently as the oldest still operating in the world. It is a parliamentary republic with a strong tradition of representative democracy13 and division of powers (Michalon 2010). the EFTA set for Iceland a deadline of three months to compensate British and Dutch governments around €4. maintaining a high level of cooperation with international mechanisms for the protection of human rights. However. The three criteria are presented next (Comision Europea 2010): 1. The prerequisite for these payments is “the decision of Althingi. The municipal authorities act efficiently. In response.  Moving forward to join the European Union? Is Iceland an ideal candidate? Historically. the progressive improvement of the economic outlook is likely to drive Iceland back to its traditional view (Michalon 2010).

a level similar to the USA. It has reached a broad consensus on key elements of recovery. improve the practices and establish institutional framework regulations are some of the key challenges to be addressed in the short term. in 2008 Iceland held the eighth highest per capita GDP (about $ 53 000). Eurofond (2007) Acquis communautaire. comprising the EC’s objectives.Iceland is a small opened economy and is a member of EFTA since 1994. Iceland is still categorized as part of the developed nations (Michalon 2010). macroeconomic stabilization is not yet complete. The authorities have taken important economic measures for stabilization. Its small population size would minimize the impact of its possible membership of the 14 acquis communautaire is a French term referring to the cumulative body of European Community laws. in particular.eu/areas/industrialrelations/dictionary/definitions/acquiscommunau taire. Despite having been hit hard by the economic crisis. Iceland is a member since 1996 of the Schengen area where there are not internal frontiers. Available at: http://www. The public and private debts need a powerful sustainable restructuring leading to the recovery. The total number of infringement proceedings against Iceland has decreased considerably in recent months. as well as judgments laid down by the European Court of Justice. The Icelandic government requested assistance from the international community (including the IMF) to support the currency and restore a sustainable macroeconomic stability. Iceland has a history of satisfactory compliance with the EEA obligations. Prominent compliance with the Union's policies allows to stay longer in line with much of the acquis communautaire14. the Icelandic economy is one of the most advanced in the world.europa. substantive rules. It has carried out economic restructuring. the primary and secondary legislation and case law – all of which form part of the legal order of the European Union (EU). This includes all the treaties.htm [Accessed 5 June 2011] . Overall. Fiscal consolidation remains a key challenge. the banking sector collapsed in 2008. regulations and directives passed by the European institutions. In addition. leaving the country the twentieth place with $ 36 000 per capita. in July 2009 the proportion of internal market legislation was introduced in national legislation as required. Legislative alignment In general. However. Given the level of risk taken by the Icelandic banks and the lack of adequate supervision of the financial sector. It anticipated a strong contraction of this indicator for 2009. Icelandic economy has evolved from an economy based mainly on the fishing industry to a more diversified economy opened to the financial sector. As a member of the EEA. primarily through deregulation and liberalization since the 1990’s. 3. According to the IMF. Iceland is well integrated into the EU economy. Iceland is well prepared to assume the obligations of its membership in most of the subjects covered by the EEA. Therefore border crossings do not require presentation of identification documents. According to the Authority and the EFTA.eurofound. Complete the restructuring of financial sector. Nevertheless. policies and.

On January 17th 2009. until now. It is unclear whether the government of Prime Minister Johanna Sigurdardottir has to resolve the political capital to bring it to fruition (Oxford Analytica 2010). customs union. Since it anticipated a defeat against a party supporting the accession. statistics. while entering the EU budget would not affect it significantly (Michalon 2010).  Impediments towards accession Despite the success of completion regarding the accession criteria. . A coalition between the IP and the SD has. degraded the image of European countries towards the Icelandic public (Michalon 2010). the LGM. o Political division: The weakness and volatility of the political system The Icelandic government itself is not united on the issue of EU membership. which represents a significant base of their electorate and whose support for the EU has grown following the crisis” (Michalon 2010). In the other hand. as well as financial control” (Comisión Europea 2010). a rapprochement with the EU. two referendums should be held: a first referendum on whether to open negotiations. In addition. the IP's opposition to EU membership appeared to be winning its support as euro adoption is seen as less and less beneficial since “the euro zone crisis continues and the krona stabilizes within the capital controls” (EIU 2011b). The PP changed completely its opinion towards the accession of Iceland to the EU. a second on the actual accession of Iceland to the UE. the Iceland's application for EU membership has caused opposition from several actors. This slight change can be interpreted as a “strategy to retain the support of the business sector. particularly on agricultural and fishing issues. been split on the issue. politics regional and coordination of structural instruments. the IP stated that if initiated. At the end of 2010. veterinary and phytosanitary policy. financial services. with the Social Democrats in favor and their right-wing colleagues against (Leonard 2008). Johanna Sigurdardottir. but it accompanied this favorable position with a series of demands. (Michalon 2010). the IP maintained its opposition to the entry into the EU in late March 2009. food safety. The sectors in which Iceland needs efforts to align its legislation according to acquis. however its coalition partner. has promoted EU membership for years. and if validated. taxation. the dispute with the United Kingdom and the Netherlands on the regarding Icesave. agriculture and rural development environment. Due to the unrealistic nature of some of their requests. it is not considered that the PP is fully in favor of EU membership. in order to comply in time of the accession criteria are: “fishing. free movement of capital. is formally opposed to it. The SDA headed by the Prime Minister.European institutions. the PP announced its support on the opening of negotiations with the European Union.

Budget deficit. joining the EU implies more than just sharing the euro as Jürgen Stark (2008).5% of the three EU countries with the lowest rate. the sector accounted for 32. has to be less than 60% of GDP Inflation rate within 1. 85% of those exports go to European nations. In addition. stated: “The fact that a country must first join the EU before it becomes a member of the euro area is not a coincidence. 3. Long-term interest rates must be within 2% of the three lowest interest rates in EU. First of all. 5. The accession to the EU could also signify a loss of sovereignty for Iceland because it will have to be accordance to the decisions about the fishing industry but “Reykjavik is not willing to abandon their prerogatives in a field that is so important to its economy” (Michelon 2010). The rapid industrial development over the past two decades now represents much less than 50% of Iceland's exports (Leonard 2008). to join the "eurozone" Iceland must fulfill several conditions. which underlines the fact that the EU is more than a mere economic undertaking. What is the reason? Iceland is aware of the need to avoid overexploitation of marine resources so it applies its own quota mechanism. That same year. Sharing a common currency implies sharing a common political destiny”. a currency is a key attribute of sovereignty. and 75% specifically to EU countries (Michalon 2010). over the past year has proved to be an important mechanism for economic adjustment.3% of total export value of Iceland (which situated it behind aluminum). “as the 55% depreciation of the Icelandic currency. Euro adoption is not anymore seen as a resolution to Iceland's immediate problems. Though. Exchange rates must be kept within "normal" fluctuation margins of Europe's exchange-rate mechanism. o European regulations on fisheries In 2008 the fish industry contributed to about 5% of Iceland GDP. called convergence criteria): 1. has to be below 3% of Gross Domestic Product (GDP) Public debt. 2. It is a deliberate approach. the krona. In addition. After all. .o The gap between the possible accession to the Union and the possible adoption of the euro One of the main causes for Iceland to apply to the EU membership is to join the euro “after the virtual destruction of its currency” (Leonard 2008). member of the European Central Bank's Executive Executive Board. this will not be immediately done because it will require a preliminary period of two years during which the Icelandic krona would need to be within the narrow band of the exchange rate mechanism. with rising revenue from exports and solid tourist numbers” (EIU 2010). 4. it is needed to take into consideration the implications of this act.

finishing with part of Iceland's government's hopes of speed membership negotiations (European Voice 2011). Being part of the Union would lead to the acceptance of the presence of foreign vessels (even British) in the waters that at the moment are reserved to Icelandic fishermen. the acquis communautaire (Vogel 2010). it is expected to lead to international litigation that could take years. . They are willing to mobilize all possible means of pressure to reach their goals (Michalon 2010). the acquis communautaire (Vogel 2010). the Icelandic government has been locked in sometimes abusive negotiations with UK and Dutch government deposit insurance schemes. Dutch and British diplomats say that substantial changes to the June agreement would amount to Iceland refusing to implement parts of the EU's body of law. The UK and the Netherlands argue that “Iceland is bound by EEA rules to reimburse account-holders” (Vogel 2010). In fact. the European Commission has described the issue as "bilateral" and states that there is no direct link between the Icesave compensation and the membership talks. then it will have to extend this priority to 15 Series of confrontations in the 1950s and 1970s between the UK and Iceland regarding fishing rights in the North Atlantic. which accounted for Reykjavik last episode of serious international tensions to date. but Iceland rejects this interpretations. Since the three referendums resulted in a negative position on reimbursing the debts. whaling is another bigger obstacle: while this activity is condemned unanimously by the EU. o UK and Netherlands possible blockage to Iceland’s accession The UK and Dutch governments have stated that they are prepared to block Iceland's membership proposal if the Icesave agreement is rejected or considerably changed by the parliament (European Voice 2009) unless Reykjavik ratifies the bill and begins implementing the repayment scheme (Vogel 2010). and contributes to the fishery closely associated with the issue of national sovereignty. UK and the Netherland did not accept the idea that the reimbursement is conditioned by the outcome of a referendum.The current European Common Fisheries Policy is widely criticized for shortcomings in its operation. Afterwards. it is still practiced in Iceland. (European Voice 2011) The UK and the Netherlands argue that “Iceland is bound by EEA rules to reimburse account-holders” (Vogel 2010). the Icelandic government has been locked in extended negotiations with UK and Dutch government concerning deposit insurance schemes. It has been forced to accept that since the country could reimburse prioritizing depositors. Afterwards. It allows up to 350 annual catches. As a result. The memories of the "Cod Wars15". European quotas (approved each year) are reported by researchers and environmental organizations to be far exceeding the amounts recommended by scientists. but Iceland rejects this interpretations. In addition. Dutch and British diplomats say that substantial changes to the June agreement would amount to Iceland refusing to implement parts of the EU's body of law. Even the European Commission itself recognized the shortcomings of this policy by stating that EU fisheries’ policies are “still characterized by making short term decisions and conduct shortsighted” (Michelon 2010).

foreign depositors as well (Euromoney 2011). In relation to this. the European Commission has described the issue as "bilateral" and states that there is no formal. direct link between the Icesave compensation and the membership talks. (European Voice 2011) .

The contribution of the fishing industry in the overall exports of goods had also been declining.is 2011). in 2009 it had a slight increase being 5. processing. it is also subject to the changing conditions of fish stocks’ exploitation (FAO 2010). The largest part of it is processed16 before export and the rest is exported as a whole fish mainly to EU member countries. employment in the fisheries has been decreasing due to the increase of automation on vessels and in fish processing (FAO 2010). Catching. but by the significant increases in exports of others industries. such as financial services. in both volume and value (Food and Water Watch 2010). actual gross outputs in prices have kept an increasing trend. Foreign currency earnings from exports are vital when the local currency is weak.9% in 2010 (statice. drying. fishmeal and fish oil . this decline is not explained by a direct fall in the fisheries themselves. However. In addition. EEA is the most important market area for Icelandic marine products and in 2010 the export value of this area amounted to ISK 160 billion or 73% of the total value of Icelandic fish exports (statice. from 80% in 1991 (OCDE 2010) to around 36. freezing. software design and aluminum manufacturing. The greater amount of commercially caught fish is exported.3% in 2007. Despite this.7% .Main Resources: Fish and Metal Industries  Fish industry: Overview and background Highly productive fishing grounds surround Iceland which makes it one of the world’s top 20 fishing nations. Nevertheless. pollock and redfish (Food and Water Watch 2010). distributing and selling fish are major sources of employment in the communities situated on the coast of Iceland in fact it represents approximately 6. for instance Great Britain and Germany. Nevertheless. Until 2000 the fishing and fish processing industries had accounted for 10-15% of GDP after this year the contribution fell down to 4.5 percent of the workforce (OCDE 2010). Although the input of the fisheries industry into GDP has turn down over the past decades. the contribution of fisheries to the economy is not stable due to fluctuations in the international fish prices. as it is occurring in this moment in Iceland. o 16 Catch Share System Individual Transfer Quota (ITQ) system salting. The main activity of the industry is catching and processing fishes: primarily cod. but also haddock.is 2011). the contribution to GDP is the highest among OCED countries. The fisheries industry is one of the most important industries in Iceland and it represents an important part of the GDP and of the exports. The fishing sector was regarded as a key economic stabilizer for the country (Food and Water Watch 2010).

the government has tried to implement policies in order to prevent the overexploitation of the different species. As a response to this. relative to their percentage based ITQ holding” (Food and Water Watch 2010). The TACs of each species are determined by the Ministry of Fisheries by taking into consideration the recommendations from the Marine Research Institute (MRI) for stock status of target species. The reason is that it undermines the fishing communities and because of the actual system. an important part of the trade is in the form of interspecies exchange17. Since that year. A huge amount of annual catch quotas is traded each year by internal transfers between vessels owned by a same operator. In the late 1980’s the extreme fishing became intolerable and there was an important pressure to establish well defined restrictions. into a unique management system so that all operators follow the same rules. The Icelandic Quota Exchange started to operate in 2001.As the marine resources are vital for Iceland. Iceland started the implementation of fishery privatization and market liberalization the same year (CBI 2008). “it is challenging and expensive to reacquire it” (Food and Water Watch 2010). According to this system. the privatization of Iceland’s fisheries “provided a get-rich-quick outlet for a select few. and (2) any vessel that does not harvest 50% of its annual catch quotas in two subsequent years will lose its permanent quota share. Furthermore. This led to the resolution of validating the legislation of the Fisheries Management Act in 1990. Divisibility and transferability. Applications for quota transfers should be presented to the Directorate of Fisheries so it can verify and register the transfers on the website. Two restrictions: (1) no vessels may purchase quotas that are clearly excessive of what the vessel can harvest. The TAC is distributed into a “fixed-quota allocations among fishing vessels. o • • Key features of the ITQ System (OCDE 2010) Quota allocation. the access to fish (fishing per se) is in control of private entities. According to the critics of this system. is establish on the basis of a biological evaluation of how abundant a fish stock is. the Total Allowable Catch (TAC). the government is reviewing a way to recover public control. Regrettably. 17 18 One operator trades a part of its annual quotas in one species for quotas in another species. Also. The Fisheries Management Act (known as the Individual Transfer Quota) changes the “management of all commercially important fish species to operate according to the privatized catch share program” (Food and Water Watch 2010). . Quota shares and annual catch quotas are divisible and transferable to other fishing vessels with minor restrictions. once a government gives this access to private entities. quotas have been “transferred on an open market by individual firms or through brokers” (OCDE 2010). while it marginalized existing small-scale fishermen and left out future fishermen and the public entirely” (Food and Water Watch 2010). some of the annual catch quotas are also traded for money. (regardless that the fishes are public resources). Another constraint is that the quota-shares held by any company or individual should not exceed certain limits19. The restrictions18 are designed to discourage speculative quota holdings.

feudal metaphors are frequently used to describe the current political economy of fishing in Iceland — for instance. rather than a valuable public asset” (Food and Water Watch 2010). figures show that “20 largest companies held rights to harvest 56. Special regional quota allocation: shock absorbers. especially those in remote villages have lost their fishing quotas and therefore face unemployment. Therefore.• • Fee.6 % of the total allowable catches in 1998/99” (OCDE 2010). anyone who wanted to fish was forced to pay private individuals or firms for their quota. numerous fisheries-dependent communities.2% of the total quotas in 1994. Since the small vessels started to gain great importance. Runolfsson (2001) argues that concentration is not a serious problem. There are two contrasting point of views on the impacts of the quota concentration system. In addition. When a community suffering from the lost of quotas through transfers or because of a reduction in catches for other reasons.5% in 1991. compared to 25. A special fishing fee has been levied on annual quota allocation from September 2004. The reason is that the “percentage of total quota shares of the 10 largest harvesting companies increased considerably from 24. These quotas are used for special allocations when local stocks collapse and a limited group of vessels which are specialized in local fisheries stocks are severely affected. Contrary to this perspective.5% by 2009 (statice. .is 2011) Management of small fishing vessels. • o Problematic of the ITQ system • Inequality: The Lucky Few and Those Who Are Left Behind After privatization. it can apply to the Minister for a special regional quota allocation. The majority of the 10 largest companies merged with other large and small companies in the 1990s (Runolfsson. Since the access to the fish was privatized it has been argued that “the opportunity to catch fish had become a private financial instrument. “large catch share holders are referred to as “sea-lords” because they dictate who gets to fish and control the quantities and quota leasing rates” (Food and Water Watch 2010). As a result. Fishermen now needed to buy or rent catch shares from private vessel owners who received some quota when the program started. Eythórsson (2000) argues that since the introduction of the ITQ system there is a huge concentration of quota shares from large companies: 22 companies shared 47.7 % in 1991 to 37. due a large wave of the mergers in the fisheries sector.6% in 1998”. In fact. Now the quota management system for small vessels is the same as to the general quota management. 2001). At that moment the fee was 6% and it increased to 9. 19 The quota share should not exceed more than 12% of the value of the total quotas allocated for all species. individual vessel quotas had been imposed on them.

Iceland provides competitive advantage to aluminum industry. High-grading is the “practice of limiting landings to more valuable grades of a targeted species by discarding the less valuable ones at sea” (Kristofferson and Rickertsen.-owned aluminum company. completed in early 2007. since there is a wide variety of different species and grades of fish that lives in the same habitat.• High-Grading For fishers it is not possible to limit their catch completely. began operations in June 2007 and is expected to have a production capacity of 346. of the USA. Iceland is a volcanic island with many active geological sites. There are great challenges for processing aluminum although it is one of the most common minerals on earth. as aluminum oxides still require temperatures up to 2000 degrees Celsius in order to melt. electrolysis20 is used for aluminum smelting. the effort used to harvest the fish is wasted. Mass production of aluminum requires huge amounts of energy. It is very hard to found aluminum in nature in its pure state because of its reactive nature. As a result of this new smelter.S. according to their wants. 2005) causing a high mortality rate of fishes. It results in the great challenge of finding places with lowcost sources of electricity/energy in order to minimize costs of smelting the aluminum (Thorsten 2008). so it is an advantage to throw away fishes that does not add profit. In addition there are also social costs: “the market value of the fish is lost. It plays a major role in the nation’s economy by providing resources and a source of income from foreign exports (Thorsten 2008). Those can be used to generate geothermal energy and hydroelectric power by tapping into the island’s rivers and glacier-fed bodies of water (Thorsten 2008). With this kind of resources. Hence. Iceland's three smelters consume at least five times more electricity as all 20 It is used to separate aluminum from its ore and bonds. This process requires a great deal of energy. Hence. In addition. the costs of importing raw material and exporting the processed aluminum can be reduce and be competitive in the market. The growth in aluminum production is the consequence of the expansion of the existing Alcan smelter which was originally built in 1969 by Alusuisse and of the construction of a new greenfield smelter owned by Columbia Ventures Co. was built to provide power to the Alcoa smelter (Business Source Premier 2008). Fishers wanted to maximize their gains. and the reproductive potential of the fish is wasted” (Kristofferson and Rickertsen. That explained the fast expansion of the aluminum industry in Iceland. it is often found bound with other elements. a new smelter owned by Alcoa. a U. 2005). the Kárahnjúkar hydroelectric power plant.000 tons per year when it will fully operate. Now.  Aluminum Industry: Overview and background Metal production in Iceland has increased over the last decades. As explained in the energy section. which started its operations since 1998 (Hilmarsson 2003). attracting foreign and domestic companies. .

From one point of view. stated that "the economy is in such a slump now that a boost would not create irrational exuberance.320. In addition. the fast expansion has caused a recent reaction among the Icelandic population and international environmental groups. by igniting an unsustainable economic boom” (LA 2011) since many foreign investors stated to pour huge amount of money into Iceland. an economist at the University of Iceland. the national power company. Although the subterranean heat is virtually inexhaustible from a global perspective. Contrary to this.000 of the country's population and these plants provide jobs for about 1. allows it to exploit its own natural resources. Even if this perspective is supported there are some critics that blame the aluminum industry “for causing the country's financial troubles in the first place. Those argue that “the smelters themselves produce emissions and waste from the process of smelting aluminum” (Thorsten 2008). Gylfi Zoega. hot springs and volcanoes. some argue that “smelting aluminum in Iceland. which is necessary to the process of smelting aluminum. by supplying the aluminum plants with hydropower and geothermal energy at competitive prices” (LA 2011). o Major concerns towards aluminum expansion plan. This metal already accounts for about one-seventh of Iceland's entire economic output (LA 2011). waterfalls. is attracting investors. In addition even if environmentalists acknowledge the use of clean energy21. Landsvirkjun. The electrolysis. they highlight the rapid expansion as a problem. Nevertheless. environmental issues are arising nowadays. “aluminum companies are extracting heat from the Earth faster than it can be replenished22” (LA 2011). 21 22 Since the plants in Iceland pollute less than coal-fired smelters in other countries . This had increased concern form environmentalist groups due to the greenhouses gases and the quality of the Icelandic air. can deplete a local site over time." though he warned against turning to the aluminum industry for "a quick fix" (LA 2011). “competitive energy costs and a highly educated and skilled labor force” (CBI). since its aluminum production from its smelters continued and helped to keep exports alive through two years of recession. produces carbon dioxide as well as aluminum metal. without allowing enough time for nature to renew the supply. digging too many wells to tap into the hot water and steam. The Icelandic government is trying to give an impulse to this industry in order to diversify the economy and decrease the dependence toward the fisheries (Hilmarsson 2003) and it has described the island as having. such as rivers.400 people (LA 2011). o Aluminum’s Economic Impact The aluminum industry has been considered as key element for the recovery of Iceland's economy after it collapsed in 2008. . 1.

Another concern is the usage of Iceland’s natural resources and the development of natural areas. Also. or have to be stored and/or used on the island. In addition. another source of waste which is produce in large quantities is the leftover bauxite. 4. in relation to Iceland's biggest smelter opened in 2007 and from whom the government built several dams and a massive reservoir.2. giving the small country more waste to deal with in addition to that created by other industries and the populace” (Thorsten 2008). . Iceland has historically viewed itself as an island with wilderness and natural preservation. also called slag. This huge amount of slag need to “either be exported from the island at cost to the companies involved and the Icelandic industry. but the production of large scale aluminum smelters and additional geothermal and hydroelectric plants will require the development and destruction natural wild areas. 3. “environmentalists fear it will speed up erosion and harm the area's population of deer and pink-footed geese” (LA 2011).

The most commonly used source for heat and electricity is hydrogen.net 2010). including: the health of the natural environment.5 as presented in appendix 2. Iceland’s minister of industry and energy. it would be making a huge impact on becoming ecofriendly. Iceland uses its geothermal landscape to utilize clean electricity and heat. by 2050. (Toptenz. air quality. fisheries management and agriculture. Iceland is often lauded for its renewable energy production. Iceland hopes to become the first country to be entirely reliant upon this energy source and despite its size.Environment and Energy According to the Environmental Performance Index (EPI 2010) Iceland is the world’s most environmentally friendly country with an EPI score of 93. Össur Skarphédinsson. from one perspective is has been argue that Iceland adopted renewable energy since it makes good economic profits. which supplies nearly every home and business with abundant green electricity and hot water. Only 18% of Iceland energy sources come from coal. Hydrogen energy is used by homeowners and those who occupy buildings. The EPI looks at ten different environmental factors for each country. but is also used for transportation. hopes to have the country carbon and oil free. water quality. Iceland is recognized since it has the highest rates for reducing carbon emissions and the planting of new forests. the other 82% is pure hydrogen and geothermal power. However. . biological diversity. While it may seem like a tough goal. hence it is not an environmental gesture at all (IceNews 2010).

comparison  Energy in Iceland The graph 12. . titled the annual generation of energy. and fuel generation is very low compared to the others. the scale is logarithmic.Figure 11: EPI rating (detail in appendix 2) Figure 12: CO2 emissions.

in 2009 it was 660 kilo tonnes and 708 in 1999. Gross consumption of electricity was multiplied by four between 1989 and 2009. This can be appreciated since in 1998 imported energy was 38% of gross energy consumption.475 to 16. This is one of the reasons why Iceland is the greenest country in the world. increased from 4. Oil consumption remain quite stable over the last decade.4% to 4. We noticed in both graphs (graphs 13 and 14) that the proportion of geothermal energy and hydroelectric energy increase while the fuel proportion decreases. That means that during Figure 13: Annual generation of energy . geothermal energy knows and expansion around 1995 while hydroelectric have a little decrease compared to the fuel proportion which drop from 17. The consumption of automobiles and equipments was 47% of total oil consumption in 2009 but 34% in 1999. both hydroelectric and geothermal energy are known to be the least emitting sources of CO2. The increase in electricity consumption is mainly due to aluminum smelters. The repartition of the gross energy consumption in Iceland in 2009 was (datamonitor 2011): • • • 66% geothermal energy 19% hydro energy 15% imported energy (oil and coal) It is important to highlight that the use of important energy has decreased 50% during the last 10 years.In proportion of installed capacity.883 GWh.7% within twenty years. In 2009 the public power plants consumed around 79% of gross consumption of energy.

Figure 14: energy installed capacity .the same period the oil use of the domestic fishing fleet decreased by 22% .

it has been noticed (graph 15) a decrease of the total fuel combustion and agriculture proportion of greenhouse gases emission. That could be explained by the emissions from the metal industry which had doubled. Greenhouse gases As we can appreciate on the graph 15 the total greenhouse gas emission has increased in Iceland during the last 20 years. mainly carbon dioxide (CO2) as it will be seeing in the next part. they have an increase around 70% between 2000 and 2008. . Figure 15: Total man-made emissions without carbon sequestration Over the 20 last years. While industrial processes emissions decrease a little bit before. We noticed that it is mainly due to emission from the metal industry between 2000 and 2008.

statis. 23 www.is . For the metal industry the increase is explained by the two new smelters constructed in the period and an existing smelter was expanded23. highlights the four most important sources of CO2 emissions: fishing vessel.Figure 16: GHG emissions by industries  Carbon dioxide The graph 17. industry and construction. In this graph it is possible to appreciate the drop of CO2 emission for the fishing vessel. road transport and metal industry. this could be explained by the Fisheries Management Act passed in 1990 (see section: Catch Share System Individual Transfer Quota (ITQ) system for further details).

Figure 17: Emission of carbon dioxyde by source .

However. a new organization appeared: STPC. In 2004. But liberalization has since then changed the game. For example. In 2003. its presence in the EU Framework . The telecom market is a good illustration of such transformation. In 1987 with the apparition of Rannis.  Main Policies o Intellectual property The regulation of Icelandic intellectual property is very similar to what is known in Western Europe.World class technologies and R&D  Overview of the technological landscape In 1940. the creation of the SPTC. 48 licenses were issued and the government was pushing for new foreign investors to enter the business. In order to develop its industry and responds to its needs. a new program aimed to amplify the R&D in marine and fishery sectors was launched. o Research and development In order to be competitive in the international economy. The public funding has proved to be very successful in the R&D over the years. Furthermore. Due to various changes in 2003. o Technology agreements / pacts To promote internationally its R&D. the first R&D establishment NRC was established. Iceland has decided to make the R&D one of its priorities. Iceland has been able to meet success in the technological field. Until 1998. In 2003. Both scientists and the entire economy have benefited from the policies. the Icelandic government decided to participate in various events. specific laws such as Trade Marks Act 1997 and the Design Act 2001 relate to other intellectual properties. Iceland furthered its technological policies. It brought in streamlined policy structure for R&D and innovation in science and technology in Iceland. Iceland has created more financial resources. which depends of the Icelandic government. This entity. R&D infrastructures have prospered in many universities. only a state owned company named Siminn was allowed to develop and use R&D. provides professional assistance in the preparation and implementation of science and technology’s policies in Iceland.

8%) (Datamonitor . such as videoconferencing and distance learning” (searchcCIO 2003). cellular phones. and public funding. between Europe and the USA.Program on Research and Technological Development has permitted great exposure. Due to its location. the two major operators.  Performance in sectors of opportunity o Telecommunication and internet The telecommunication market is considered small compared to the rest of the world. o ICT Sector ICT (information and communications technology) “is an umbrella term that includes any communication device or application. Iceland ha the lowest R&D expenditure in the EC and OCDE communities ($0. o Biotechnology Iceland is considered as an ideal environment for the biotechnologies. compared to 93% in France and 60% in the world (TNS Sofres year -2011. are dominating the market. For example. . Universities have furthermore a very important role in international relationships.com 2010).45 billion) but compared to its GDP this number turns out to be one of the highest (2. The Icelandic telecom market has been very competitive. Many reasons explain this: good health care system. as well as the various services and applications associated with them. computer and network hardware and software. Journaldunet. therefore. important place given to R&D and universities. television. o Research & Development In Iceland’s case.2011). more than 2/3 of the Icelandic use it frequently. prices decrease in order to benefit both. GPRS and NMT have a great presence. ICT is a high developing sector in Iceland thanks mainly to entrepreneurship labors. and its population positive reaction toward science and R&D. In fact. the total number of broadband internet users stood at 0. Iceland Telecom (Siminn) and Og Vodafone. Concerning internet. satellite systems and so on. encompassing: radio.26m. households and companies. in terms of numbers in 2008. links between the United States and Iceland in R&D have been constructed thanks to the academic field. GSM. There were 123 mobile phones per 100 people in 2009. In the same year. Iceland is able to be one of the top nations in biotechnology. the numbers must be carefully analyzed. but the penetration of high technologies is one of the highest in Europe.

Despite 24 Vlad Vaiman. In order to fight and change this business culture. A strong supervisory authority should read the signals and adapt its policy toward wrong doings. free flow of labor. as part of the European Economic Area. But what were the reasons that led the Viking Tiger to hell? And what can be made to comeback to a heaven status? o Weak business culture The privatization of banks in the 90s led to a change of management and strategies. They very quickly changed the strategy of the banks…” The controls by a financial supervisory authority and the Central Bank were not appropriate. and same regulations on commerce as the European Union. free flow of capital. Currency According to experts.Conclusion: Lessons learned  Lesson #1: Economy Iceland’s economy was among the top economy in the world and the financial crisis underlined its weaknesses. And according to Gylfi Magnússon. Therefore Iceland had and still has its own currency: the krona. Throstur Olaf Sigurjonsson and Pall Asgeir Davidsson . power or size should have been controlled frequently. lessons could have been taken before. This allows the country to conduct its own money policy. Other experts24 declared in the Journal of Business Ethics (2011) that: “Although there was a high level of corruption in Iceland. Minister of Business Affairs in Iceland: “the people who bought the banks turned out to be not quite the kind of people you would want to run banks because they were fairly aggressive and risk-loving. That way Iceland decided to have high interest rates to fight inflation. Iceland gets probably 90% of the benefits of being an EU member: free trade. But Iceland always wanted to keep its sovereignty over its policy and particularly those concerning the fishing sector. it transpired not so much in direct benefits to the parties involved but rather as an attitude that allowed a weak business culture and unethical business behaviors to flourish. For example various indicators concerning the corruption but also the balance of strength. and that the traditional measures of corruption proves inadequate in capturing it”.

A communication campaign from the government would probably have helped. a tax increase to restore the balance of public finances. those rates were not considered by foreign investors high enough and they attracted capital. Iceland would have been able to have access to the European Central Bank. In fact. This led to the amplification of the crisis. This would have helped the country to obtain liquidities. among other things. To illustrate the trade deficit one image can be revealing: Iceland was importing more Range Rovers than the rest of Scandinavia which is 100 times as large a market… The consumer behavior is the trickiest element to get influence on. the Icelandic government would have been able to lower the risk of the crisis and maybe with better control even avoid it. But these measures would involve.the euro . started to invest in stocks or real estate. Still. lot of inhabitants. The citizens expect to see quick benefits by joining the EU. civil liberties remain well entrenched. but until which point this right should be respected when the economic recovery depends on it? The tensions in the diplomatic relations with these two countries are delaying the loan given by the IMF and the accession toward the EU.would not happen until several years after joining the EU. seeing their fortune rising on paper due to the bubble asset inflation. and the institutions work well in enabling .  Lesson 2: Political The degree of democracy applied in the country is an actual challenge of the political arena. By adopting the euro or at least by hooking the krona to the euro. being a currency supporting a small economy. o Consumer behavior The Icelandic population was highly involved in the creation of the bubble. Such behavior led to the overheating of the economy. One of the main issues is to convince Icelanders to ratify the accession referendum. The krona. Therefore such changes would have a high political cost. The political division in the government and the disillusionment of the citizens toward politics represent other challenges to the political arena. The citizens have the right to decide. can also be depreciated by markets pretty easily and pretty quickly. to the increase of the exchange rate and to the trade deficit of Iceland. The government should carry out internal reforms in order to be in compliance with each of the convergence criteria.this well considered measure. when the main reason for their support . By being part of the euro zone. but they will have to wait for several years before noticing any results. Another aspect that has to be dealt with is the recurrent negative answers of the citizens in the referendums regarding the payment of the debts to the UK and the Netherlands caused by Icesave.

especially involving a significant falls in income. the Committee took its decision and stated that “Iceland’s privatized catch share market violated international law… since the privatized catch share market transformed the right to use and exploit this public property into individual property” (Ibid). The ITQ was accepted. Legal Challenges. Concentration of quota ownership: distributional effects and equity issue. Probably the best . This means that just when the stakeholders face a crisis. the actual government started reviewing the country’s fishery management system and announced that reforms are being considered.changes of government and effective opposition to whichever government is in office (EIU 2011c). The ITQ system has been taken to court several times. Since ‘high-grading’ became a common activity to increase profits. it should places a cap on catch levels and finally rents catch shares on a “fixed-term basis to eligible entities such as independent fishermen. the government decided to permit that every vessel could land up to 5 % extra of the vessel’s annual catch quota. In addition. It is an evolutionary process of “gradual discovery and difficult bargaining… it evolved more by trial and error than by a grand design” (OCDE 2010). o o o o In 2009. Regarding the problematic with the accession towards the UE and regarding the sovereignty of the fishing industry. they are willing to accept policy changes (Ibid). there are two possible solutions: first. to grant Reykjavik long periods of transition in this field. in order to pursue their occupation” (Food and Water Watch 2010). The idea under this approach is that the government maintains the management control over the public fish. Also. in response to a perceived danger of a collapse in the stock levels and a serious financial crisis in the fisheries in 1984. A new approach to manage the fish industry is called: Cap-Rent-Recycle.  Lesson 3: Fishing Industry o The introduction of the ITQ system in fisheries management is not a simple task. The Catch or “high-grading” issue. Therefore it causes high unemployment in fishing communities that are heavily dependent on the fisheries industry (Ibid). communities and firms. and finally invests the revenue in better management practices” (Food and Water Watch 2010). It has been argued by critics of the ITQ system that the system could encourage quota concentration. some fishermen took their case to the United Nations Human Rights Committee alleging that “privatization violated the International Covenant on Civil and Political Rights because the system forced fishermen without quotas to pay money to a privileged group of citizens. that the EU reforms in a meaningful and convincing way its fisheries policy. the “holders” of quota. In October 2007. This reforms could end in a buying (or reclaiming without payment) of all of their catch shares at 5 percent per year over 20 years (Food and Water Watch 2010). second.

and practical places to build large sites without interfering with residential areas will meet the borders of Iceland’s many wildlife refuges. Their supporters argue that large-scale investment projects are vital to encourage economic growth and job creation (LA 2011). “Iceland does not want every river to have a dam and every volcanic site to have a geothermal plant.  Lesson 5: Environment. Between 1998 and 2006. seems to be reachable. The reason for that is that the excess power generated can be used as a mean to support the economy. Iceland dedicated lot of its resources to Technologies and therefore became one of the most technological advanced countries in the world. Nevertheless.  Lesson 6: Technologic Outlook and lessons to be learned During the recent years. Concerning the other sources of greenhouse gases. Due to the financial . preventing more building” (Thorsten 2008). the aluminum industry (the most polluting of its sector) could improve considerably its emissions. Iceland’s economy changed. the aluminum industry will face future problems if it continues to expand at this velocity. The goal to reach 100% green electricity. Attracted by low energy costs. lessons to be learned Energie Outlook and Iceland is often lauded for its renewable energy production. allowing the second one to buy time to shape the first one. exploiting geothermal and hydraulic resources. so the seemingly free energy will eventually “run out”. It went from a traditional economy to giving more importance to the development of knowledge technologies. foreign aluminum companies are eager to expand operations.  Lesson 4: Aluminum Industry The expansion of the aluminum industry appears to have a positive influence on Iceland. It is expected that the aluminum will provide more stability and growth to the economy. the fastest growing sectors of the Icelandic economy included R&D services. In fact. computer services. chemicals and financial intermediation.solution lies in a combination of both options. Iceland should strengthen its laws concerning pollution (with high priority on the tourism sector) and should continue promoting hydrogen powered transportation. it supplies nearly every home and business with abundant green electricity and hot water.

The Nordic country should use the competitive advantage it possess over other countries in R&D to attract a different type of investors.crisis that hit the country in 2008. . Iceland has lost lots of potential investors. .

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60% 0.41% 2.60% 0. ) 4 Wholesa a reta tra hotelsa resta nts. except furniture D-21 Manufacture of pulp.40% 0. F inancia interm l edia tion J-65Financial interm ediation.40% 0.6 % 6 3 9.99% 4. nd ctivities K-70 Real estate activities K-71 Renting of machinery and equipment K-72 Computer and related activities K-73 Research and development K-74 Other business activities 6 Other service a .9 % 3 0 .5 % 9 4 1 . H ltha socia work ea nd l O.81% 1 1 .10% 4 0 .10% 1.70% 3.00% 0. reproduction of recorded media D-23 Manufacture of coke.49% 1.50% 9.1 % 6 7 . E duca tion N.0 % 1 .30% 1.9 % 4 0 .8 % 0.10% 0.22% 0.60% 0.0 % 10 0 0 . hunting forestrya fishing(A+ ) .00% 0. refined petroleumproducts D-24 Manufacture of chemicals and chemical products D-25 Manufacture of rubber and plastic products D-26 Manufacture of other non-metallic mineral products D-27 Manufacture of basic metals D-28 Manufacture of fabricated metal products.60% 4.00% 1.00% 1.70% 0. travel agencies I-64Post and telecommunications 5 F ncia rea .0 % 3 9 .1 % 10 0 0 .50% 0.50% 0.00% 0.00% 8 0 .10% 0.2 % 4.20% 1.7 % 9 7 .9 % 1.50% 0.70% 4.70% 1.00% 0.5 % 7 0 .10% 0.08% 1 9 .50% 0.80% 0.4 % 4 0 .0 % 2 0 1 .3 % 2 0 1 . l-esta rentinga businessa te.60% 1 0 .1 % 10 0 0 .00% 0.00% 0.1 % 10 0 0 .60% 1 .50% 1.81% 3.7 % 6 9 .6 % 1.2 % 0 0 .33% 0.10% 3.00% 5.50% 1 .30% 1 .00% 2.c.20% 0.2 % 6 7 8 9 .2 % 2 6 8.30% 1 .8 % 8 7 .18% 5.90% 1.7 % 7.40% 1.40% 1.7 % 8 2 .00% 0.70% 0.20% 1.10% 0.60% 1.70% 3.00% 0.20% 0.e. eal te.40% 2 .60% 0.00% 0.80% 5.90% 1 .10% 0.0 % 9 0 1 . nufa cturing D-15 Manufacture of food products and beverages D-16 Manufacture of tobacco products D-17 Manufacture of textiles D-18 Manufacture of wearingapparel.40% 0.20% 3.80% 0.10% 1. riculture.10% 0.00% 0.30% 0.30% 0.70% 0.10% 0.00% 0.1 % 1. nd ura nsport a com unica nd m tion (G+ + H I) G. otelsa resta nts nd ura I.5 % 6 8 .90% 1 0 .50% 0 0 .00% 0.1 % 2 .00% 0.1 % 1.80% 0.80% 0.3 % 4. Wholesa a reta tra repa of m le nd il de.10% 0.1 % 1 .00% 0.50% 0. D-32 Manufacture of radio.2 % 4 0 .8 % 2 0 1 .00% 1.20% 0.80% 0.29% 2.3 % 8 6 1 .40% 1.00% 0.30% 0.20% 0.16% 0.30% 0.1 % 0 3 1.6 % 0.9 % 0.72% 3.69% 3.8 % 3 0 7.70% 0. lectricity. g sa wa supply a nd ter E-40 Electricity.1 % 0 0 .20% 1 . Other com unity.70% 0.59% 2.1 % 2 4 1 .50% 0 0 .40% 1.8 % 3 0 1 .9 % 2 .0 % 2 0 8. D-37 Recycling EE .33% 7.9 % 3 4 1 .00% 0.7 % 1 3 1 . P te householdswithem riva ployedpersons T l ota S of 1 8 S of 1 8 S of 1 9 S of 1 9 S of 2 0 S of 2 0 S of 2 0 um 9 0 um 9 5 um 9 0 um 9 5 um 0 0 um 0 5 um 0 8 1 .00% 1.30% 0.50% 1 .10% 0.00% 0.6 % 0.00% 0. printing.00% 0.20% 0.60% 0.00% 0.8 % 1.5 % 2 0 10.0 % 3 0 .1 % 0 0 1.00% 3.70% 0.60% 0.50% 0.00% 0.0 % 9 0 5 0 .50% 1.c.20% 0.60% 0.00% 0.8 % 1 0 9 0 . sanitation & similar activities O-91 Activities of membership organization n.89% 1 9 . paper and paper products D-22 Publishing.00% 0.47% 0.69% 1.90% 1.9 % 3 9 .00% 0.00% 1.7 % 9 0 .4 % 7 0 1 . GDP by industry R L bels ow a 1 Ag .5 % 3 9 .89% 4.20% 8 0 .10% 0.30% 0.30% 1.0 % 1 .30% 0.00% 0.20% 0.2 % 6 9 .60% 0.20% 0.60% 1.0 % 2 . ir otor vehiclesa householdg nd oods G-50 Wholesale trade and commission trade. huntinga forestry nd A-01 Agriculture and hunting A-02 Forestry.00% 0.10% 1.20% 0.10% 0. ishing opera .20% 0.c.5 % 0 4 2 .8 % 3 0 .1 % 3 0 .50% 1 .20% 0. le nd il de.40% 0.50% 1 .1 % 7 0 . Ag riculture.60% 0.1 % 0 0 . nd B A.10% 0.e.00% 0. except insurance and pension funding J-66Insurance and pension funding.00% 0.08% 2 .40% 1.90% 0.2 % 1 0 .3 % 2 0 .80% 4. trailers and semi-trailers D-35 Manufacture of other transport equipment D-36 Manufacture of furniture.59% 0.4 % 4.30% 0.00% 0.90% 0.0 % 1 0 . nd ctivities(J+ ) K J.20% 0. except machinery and equipment D-29 Manufacture of machinery and equipment n.4 % 4.4 % 1 0 .7 % 0.0 % 8 8 9. dressing.60% 0.0 % 3 9 9.60% 0.2 % 4 0 .50% 0.30% 1.4 % 5 0 8 6 .4 % 9 9 .00% 0.70% 0.00% 0.0 % 2 0 1.0 % 7 2 . logging and related service activities BF . tra .00% 0.00% 1.8 % 3 8 .00% 0.50% 4. except of motor vehicles.90% 1.6 % 7 5 5 8 .10% 0.5 % 1 0 1 .70% 3.7 % 7 2 .0 % 10 0 0 . includingenerg (C+ + ) .60% 0.10% 0.60% 0.20% 0.7 % 6 5 1 .3 % 1.20% 0. televison and communication equipment and apparatus D-33 Manufacture of medical.50% 4.59% 0.0 % 1 9 .50% 0.69% 1.60% 1.30% 6. cultural and sporting activities O-93 Other service activities P.00% 0.1 % 0 0 .20% 0.69% 4.9 % 7 8 .70% 1.30% 1.00% 0.0 % 1 0 .91% 1 .19% 2 .40% 0.4 % 3 0 .00% 0.8 % 3 0 5 0 .80% 0.20% 0.00% 0.80% 2 .00% 0.30% 2. except compulsory social security J-67Activites auxiliary to financial intermediation K R esta rentinga businessa .10% 0.70% 0.5 % 9 0 .20% 5.50% 0.5 % 2 0 .3 % 3 9 .00% 0.7 % 5.2 % 3 4 10.2 % 4.20% 0. O-92 Recreational.00% 0.00% 0. precision and optical instruments.30% 2.80% 0.4 % 7 8 9 9 .60% 1.00% 0.40% 0.40% 0.00% 0.0 % 2 .11% 1.1 % 0 0 1 .5 % 0 6 1 .4 % 2 9 .90% 2.40% 1. ina l. purification and distribution of water 3 Construction(F .20% 0.7 % 1 . ctivities(L -P) LP .10% 0. transport via pipelines I-61Water transport I-62Air transport I-63Supportingtransport activties.40% 1.60% 5.40% 0. stora e a com unica ra g nd m tion I-60Land transport.3 % 4 7 2 .40% 2.50% 0.20% 0.1 % 0 0 .0 % .50% 4.50% 0.1 % 0 0 1 . tionof fishha tcheriesa fishfa s nd rm 2 Industry.00% 0.67% 0.1 % 6 0 1 .2 % 5 2 .0 % 8 0 .7 % 0.00% 0.00% 0.1 % 4 8 .30% 1.50% 0 0 .0 % 0. manufacture of luggage D-20 Manufacture. dyeing of fur D-19 Tanning.00% 0.30% 0.00% 0. manufacturingn.1 % 2 6 1 . T nsport.50% 2.00% 0.10% 0.20% 0.50% 0.00% 0.40% 1.70% 0.30% 0.09% 1 .9 % 8 0 .e.50% 4.00% 0.40% 1.40% 0.00% 0.8 % 3 0 .7 % 4.40% 2 .90% 2.8 % 4 1 .50% 5.00% 0.c.00% 0.1 % 8 0 .50% 0 0 .9 % 7 0 5 0 .1 % 7.Appendix 1.00% 1.70% 0.40% 0.00% 0.49% 0. Mininga qua nd rrying D Ma .4 % 4 0 2 .5 % 0.20% 0. watches and clocks D-34 Manufacture of motor vehicles.0 % 5 0 5 8 .2 % 7 0 1 .60% 0.7 % 1 6 1.20% 2.10% 0.00% 3.60% 0.80% 1 0 . D-30 Manufacture of office machinery and computers D-31 Manufacture of electrical machinery and apparatus n.00% 0.29% 2 .50% 0.7 % 4 0 .90% 2 0 .00% 0.00% 0. socia a persona service a m l nd l ctivities O-90 Sewage & refuse disposal.70% 0.20% 0. ublica inistra dm tion.2 % 7 0 5 0 .1 % 1 6 1.20% 0.08% 4. gas steamand hot water supply E-41 Collection.00% 0. dressingof leather.4 % 6 5 1 .50% 0.30% 0.00% 0.80% 1.40% 2.80% 0.80% 0.0 % 2 . of wood and of products of wood and cork. except of motor vehicles G-51 Wholesale trade and commission trade G-52 Retail trade.8 % 2 8 5 9 .1 % 0 0 .58% 7.00% 0.20% 1.9 % 8 2 1 .70% 1.20% 1.00% 0.10% 0.60% 1.3 % 7 0 .2 % 0.4 % 0 6 9 9 .00% 0.70% 0.00% 2.50% 0.5 % 1 0 1.5 % 4 0 0 0 .90% 0.9 % 8 6 5 2 .50% 1 .60% 0.30% 0 0 .99% 0. com pulsorysocia security l M.40% 1 .50% 0 0 .10% 0.7 % 5 8 . y DE C.20% 1 .3 % 9 6 .40% 0 0 .70% 0.89% 0.1 % 10 0 0 .0 % 10 0 0 .0 % 1 .79% 5.10% 1.4 % 3 4 0 0 .8 % 7 8 0 0 .30% 1 .40% 0.60% 1.10% 0.00% 0.20% 0.e.8 % 2 6 0 0 .4 % 1 1 .0 % 4 0 0 0 . repair of personal and household goods HH .00% 0.9 % 9 6 1 .

2.EPI Rating .