Iceland Pushes to Become Arctic Hub After Scrapping EU Accession

Iceland wants to turn itself into a hub for business in the Arctic and strike more trade accords on its own after scrapping talks to join the European Union, its foreign minister said.

“The focus of Iceland’s foreign policy is on the Arctic,” Gunnar Bragi Sveinsson said in an Oct. 25 interview in Reykjavik. The island will work for deeper cooperation within the Arctic Council and seek to provide a base in the region to help support trade with China, Singapore and South Korea, among others, he said.

The Arctic is becoming a magnet for countries seeking to benefit from new shipping routes created by rapidly melting ice in a development that will make the trip from Europe to Asia shorter and cheaper. The softening ice could also bring within reach the 30 percent of the world’s undiscovered natural gas reserves and 13 percent of its undiscovered oil that lie under the Arctic Ocean floor, the U.S. Geological Survey estimates.

Iceland originally sought to enter the 28-nation bloc after the collapse of its biggest banks pushed the island’s economy into its worst recession in six decades and left it reliant on an International Monetary Fund-led bailout.

“I hope Iceland will never join the EU,” Sveinsson said. “It’s impossible to say what will happen in 10 years or 20 years, but in my opinion the EU is moving in a direction that should make it less desirable for Iceland to join. There’s greater centralization, power is being shifted from the sovereigns to unelected bureaucrats.

The new government, which ousted a Social Democrat-led coalition in April, has also said it will review a decision by the previous administration to block a property development plan by Chinese billionaire Huang Nubo.

“It’s very important for us to have a free trade agreement with China,” said Sveinsson. “The Chinese are interested in Iceland and the Arctic and naturally Iceland should utilize that interest, just like Iceland utilizes that interest among other nations. Hopefully, Iceland’s relationship with China will grow stronger. Of course, that will have to be on our terms.”

Full article: Iceland Pushes to Become Arctic Hub After Scrapping EU Accession (Bloomberg)

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