A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
Focus on issues

The European Union’s hackneyed attractiveness



Thierry Pouch,

Permanent Assembly of Chambers of Agriculture (APCA)



“Europe, love it or leave it», or even better do not join it. This is what Iceland finally decided on March 12, 2015 when it announced it was withdrawing its candidacy to become a member of the European Union. Now that the country is experiencing an economic recovery following the 2008 turmoil, Iceland, whose government includes some euro-skeptics, no longer acknowledges the advantages in joining the 28 member-states.

In a recent editorial we are publishing below
1, Thierry Pouch explains why the Icelandic reversal is in fact the confirmation of a dissent from Europe. Unfortunately, the whole European construction now seems to be stumbling: Greece prefers to turn to Russia and the UK referendum on leaving the EU could occur in 20172.

The case of Iceland represents the ultimate symbol of a Europe in search of a strategy, and harshly lacking the political will to confront the crisis, particularly in the euro zone. We can make the same observation regarding the inability of the CAP to meet the challenges of European agriculture.


momagri Editorial Board



The economic and financial crisis that tuned Iceland into one of its emblematic victims in 2008 had persuaded this small economy to apply for membership in the European Union.

For the first time in the history of the European construction, a nation has withdrawn its candidacy. At a time when Iceland has overcome the crisis, how should we understand this unilateral political reversal from the Reykjavik Government? Is it an inward-looking position or the EU’s loss of attractiveness?

Earlier this year, one had to carefully screen the economic press to learn about Iceland’s decision to withdraw its candidacy for membership in the European Union, and grasp its impact. This small Northern Atlantic country, home to 325,000 people and member of the European Economic Area (EEA), was so mired in the economic and financial crisis in 2008 that it turned to the European Union as early as 2009 to consider the possibility of joining, with the hope of breaking from isolation and getting the long-term benefits from the “solidarity” that assisted nations such as Spain and Greece. The social-democrat majority that was elected in 2009 to replace an administration swept away by the economic, financial and social turmoil initiated this perspective. This explains why a majority of the population was, for a time, in favor of EU membership. In 2009, the country’s national debt neared $4 billion, or over $12,000 per capita.

Although it was inadequately commented, the January 2015 reversal represents a bitter dissent for the European Union, which, as usual, still hopes to be attractive so that Iceland reverses its decision.

Clearly, the center-right government, which has now been in power for two years and whose euro-skeptic leaning was known to the population, has no intention to do so. Except that between leaning and acting was a step that Prime Minister Sigmundur Gunlaugsson has taken, much to the displeasure of its citizens, who noisily took to the streets this past March to show the Government their dismay and resentment on this forced decision since they were expecting a referendum. How did we get to this unprecedented situation in the history of the European construction? There is of course the thorny and recurrent issue of fishing quotas. The Icelandic economy is partly based on this economic activity that, when combined with agriculture, accounts for seven percent of GDP, while other interests include services (computers and software) and manufacturing (hydropower and fish processing). Iceland and the Icelandic people mistrust the European regulations concerning fishing.

However, there might be other reasons that led the Icelandic Government to abandon the negotiations with the EU, and among them the benefits from the implementation of a policy focused on exiting the economic crisis. The economic and financial policy conducted at the height of the crisis––the strong devaluation of the Icelandic kròna to stimulate the competitiveness/price ratio of exports especially regarding the fishing sector, return to capital controls and unilateral reduction of household debt––has ultimately allowed to emerge from the crisis faster than expected, leading the Foreign Affairs Minister to state that “the country’s interests are better served outside of the European Union.”

Economic growth was 1.5 percent in 2012, and will reach 3 percent at the end of 2015, with an unemployment rate at 4.3 percent since the end of 2014. Iceland’s current external balance, that was still negative at 5.3 percent of GDP at the end of 2012, became positive in 2014 (2.1 percent) and should reach approximately 2.4 percent in 2015. While this decision will certainly further split the Icelandic population, it shows to anyone who wants to see it that the four-year old strategy espoused by the euro zone to exit the crisis is not comparatively the most effective. More globally, the EU must develop its talents and review its fundamentals to maintain its attractiveness. For in addition to the small nation of Iceland, the United Kingdom might leave the EU if David Cameron were to win the legislative elections, thus opening the way to a referendum on staying or exiting the EU. It will then be a much larger subject…



1 Thierry Pouch’s full editorial is available from:
http://www.chambres-agriculture.fr/thematiques/economie/toutes-les-publications-economiques/article/lettre-economique-n-350-da/

2 See momagri’s article on this issue:
http://www.momagri.org/UK/a-look-at-the-news/Referendum-on-Britain-s-exit-from-the-EU-What-are-the-consequences-for-agriculture-_1545.html



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Paris, 19 December 2018