One year after its economy was swept away by the crisis, Iceland is still debating whether to seek the protection of EU membership. The prime minister, Johanna Sigurdardottir, wants to join the club, but others fear they will lose their sovereignty.
Össur Skarphedinsson, Icelandic Minister of Foreign Affairs comments on the severe economic crisis that has hit his country since last year’s financial meltdown. He also explains why eu membership could save iceland.
This week we take you to Reykjavik, the westernmost tip of Europe, for a special programme on Iceland, a country still struggling to emerge from last year's financial meltdown.
Iceland's parliament has voted in a law that will allow 3.8 billion euros to be reimbursed to the British and Dutch governments, who compensated money lost by clients of the country's online Icesave bank after it went bankrupt.
The International Monetary Fund has agreed to pay the second part of its 2.1 billion euro loan to Iceland despite protest by the United Kingdom and Netherlands. Both countries wanted to settle a banking dispute with Iceland first.
In the wake of the global credit crisis, Iceland has reconsidered its position regarding the EU and is now actively pursuing membership. However, to become part of the club, the island would have to give up its whaling tradition.
Iceland's finance ministry announced a plan on Monday to recapitalise the three major banks it nationalised at the height of the country's financial crisis last October. The government will issue bonds worth 1.5 billion euros.
Icelandic Prime Minister Johanna Sigurdardottir (pictured) welcomed a parliamentary decision to submit an application for EU membership, calling the decision "the most historic vote" in the republic's history.
Iceland is to repay 3.8 billion euros forked out by the British and Dutch governments to compensate those who lost money in the collapse of Icesave bank.
The Icelandic central bank announced on Thursday a one percent interest rate cut to 12 percent. This fourth drop in three months comes after Iceland suffered a major economic blow in October when its three main banks collapsed.
