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On Focus
Iceland
official Name
Iceland
Capital City
Reykjavík
Area
103.000 km²
Population
2,26 Mil.
Population density
3,3/km²
National language
Icelandic
Government
Unitary parliamentary republic
Head of State
President Guðni Thorlacius Jóhannesson
President
Prime Minister Bjarni Benediktsson
anthem
Lofsöngur

“Iceland was the first democratic country to elect a woman as Head of State.”

AS THE "OLDEST DEMOCRACY IN EUROPE", Iceland was hard hit after the financial crisis in 2008, but the 330,000-people state has recovered quite well. Already due to its geopolitical location between the continents, countries from North America and Europe are the most important trading partners of the volcano island, but also an opening to Asia is now striving. In an interview with the Diplomatisches Magazin, the Ambassador H.E. Martin Eyjólfsson speaks about the new coalition government of the Independence Party and the liberal parties, renewable energies and tourism as an economic factor.
Ambassador,

in many ways Iceland is a special country. On the one hand it is the oldest democracy in Europe, as the parliamentary roots go back to the year 930. On the other hand, after a conversation between Reagan and Gorbachev over 30 years ago the end of the cold war was launched here. How has your country changed in the last 30 years and what is special about Iceland for you?

Well believe it or not, it is less than thirty years ago that the ban on selling beer in Iceland was lifted! Iceland has become more open, economically and culturally. And there are quite a few more of us – in fact our population has increased by 30 per cent, buoyed by a significant increase of Icelanders of foreign origin. Iceland is more diversified; some would even say we have transformed our economy. But if I were to point to just one issue, I would say that Iceland has continued to become a more open and tolerant society. From the famous women’s strike of the 1970s, women have pushed for equality. Icelandic women have a very high participation rate in the workforce, though equal pay is still an issue, and we have good paternity as well as maternity leave. Iceland was the first democratic country to elect a woman as Head of State, Vigdís Finnbogadóttir, and another women, Jóhanna Sigurðardóttir, was the first openly gay head of government.

After the financial crisis in 2008, your country was economically, but also politically shattered, but it still has recovered quite well. Last year, however, the involvement of Prime Minister Sigmundur Davíð Gunnlaugsson in the Panama Papers brought a new setback, followed by protests for days. What do you expect from the coalition government, which has been active since January, consisting from the Independence Party and the liberal parties, which was elected in autumn 2016?

As a civil servant I hope that each and every Government manages to fulfill and implement its policies in an effective manner. But it is true that the events in 2008 were a hard hit on Iceland. The financial and economic crisis put the social contract in our part of the world to the test. I think it is safe to say there is widespread acceptance among politicians that this trust needs to be restored. This applies to politics and politicians, the parliament, governmental institutions, the judiciary and the media. Growing wealth inequality and the downsides of the free market can, among other things, also be mentioned in this context. All this has contributed to more vocal and active public discontent during the past decade. I think it is fair to say there is strong political consensus in Iceland that public confidence needs to be restored. This is one thing our newly elected president has stressed on a number of occasions.

In terms of its external policy, Iceland maintains diplomatic relations with many states and is a member of over 80 international organizations. The focus is on Nordic cooperation and arctic politics as well as the NATO alliance. In addition to its historical proximity to the US, there have been intensified relations with Russia, China and India. Which countries are the most important partners and why?

Let’s not forget that all Partners are important. All countries, big and small alike, have a role to play in addressing the challenges of our times. Environmental issues, defense matters and the improvement of the human right situation in the world are a part of. A comprehensive, foreseeable and solid international platform is desirable in order to address and resolve these issues and a fruitful inter-state co-operation is not least benefitting small states like Iceland. However, we cannot forget our location. Iceland is a European state, in the Nordic family, and our friends in the European Economic Area are our biggest trading partners. Having said that our relations with the US and North America have always been strong and extremely important. So one can say Iceland has assigned great importance to be politically and economically firmly rooted between the continents and we share the same values as partner on both sides of the Atlantic.

Having a small home market we also are heavily dependent on open access to foreign markets. Therefore our participation in EFTA, the European Free Trade Association, with its comprehensive global network of 38 free trade partners, is of utmost importance. The relationship with the three countries that you mention in your question, Russia, China and India, stand on a solid basis. Our free trade agreement with China is an illustration of this and hopefully we will soon have more favorable winds in order to resume the unfinished EFTA free trade negotiations with India and, when the time is right, Russia.

“The European Union is by far Iceland’s most important market.”

Iceland sources for about half of its imports from the European Union and for almost 80 per cent of its exports. Seven years ago, Iceland adopted the EU accession request. Since then, the question of accession has always been controversial in your Parliament and the Icelandic public. What is the current standing?

As you mention in your question the European Union is by far Iceland’s most important market. Good relations with our friends in Europe have been one of the cornerstones of every Government since the founding of the Republic, the present government being no exception. Our solid relations with the European Union have been cemented in the Agreement of the European Economic Area for over two decades.

In 2009 Iceland under the coalition Government of the Social Democrats and the Left Green movement applied for a membership of the European Union and started the accession process which lasted a few years. After the 2013 parliamentary election the coalition of the Independence Party and the Progressive Party decided to stop the accession process. That decision still stands and the recent elections late last year did not change anything in that respect.

As the smallest economy in the OECD, Iceland is in an upper category in GDP per capita with almost 46.000 Euros. Two thirds of GDP is generated by services, 20 per cent by industry and ten per cent by fisheries. With what measures does your government want to diversify the economy further?

Diversification of the economy and competitiveness go hand in hand. Iceland has gone a long way in diversifying its economy in the past decades. 30 years ago Iceland was more or less a one-crop economy dependent on the fishing sector. Today it rests on three main pillars: renewable energy and power-intensive industries, fisheries and most recently tourism, which has recently surpassed the other two as the largest economic sector in Iceland. In addition Icelandic companies have become highly competitive at both the regional and international stage. These include companies in sectors such as high tech services, IT, engineering, food processing, biotechnology, consultancy and design. This is supported by strong fundamentals such as good infrastructure, a multilingual and young population, abundant clean energy, rich marine resources, an educated and innovative labour force and a strategic location.

Iceland is continually ranked as one of the most highly developed societies in the world and it is the main task of every Government to keep Iceland competitive. Key to this is active participation in the European Economic Area, granting access to EU’s single market, having a favourable tax environment and a business friendly environment. Through its participation in EFTA, Icelandic businesses have access to a wide-ranging network of Free Trade Agreements with almost 40 countries around the globe. Furthermore, Iceland was the first European Country to conclude a Free Trade Agreement with China, which along with other trade arrangements secures strong trade links to the important market in Asia.

Iceland is the world’s number one in the use of renewable energies. Last year, at the World Economic Forum, your country was ranked second in the Environmental Performance Index of the universities of Yale / Columbia among 180 countries. What is the success recipe and which specific projects are exemplary for this?

Actually we are blessed with natural resources – an abundance of renewable energy, and we have developed considerable experience on how to use this green energy. Iceland is one of the most experienced countries in the world in use of geothermal energy. 100 per cent of our electricity is produced from sustainable sources – 60 per cent from hydro and 40 per cent from geothermal and around two- thirds of the country’s energy potential remains still untapped. So there is considerable potential for future development. We also export our renewable energy expertise all over the world. Our know- how covers a wide portfolio, from drilling, energy transport under harsh climate conditions, energy efficiency, engineering, design of high voltage transmission lines, energy related IT solutions, spin off and high tech applications, best practice, and international project management.

Among some international projects are the following. Firstly the Iceland Deep Drilling Project: The main purpose of the IDDP project is to find out if it is economically feasible to extract energy and chemicals out of hydrothermal systems at supercritical conditions. Secondly the Algae cultivation and research: Iceland was named as a premier location for algae biomass production at the 2013 European Algae Biomass Conference because of the country’s renewable energy resources and logistic potential. And thirdly the Geothermal Training Programme of the United Nations University (UNU-GTP) is a postgraduate training programme, assisting developing countries in capacity building within geothermal exploration and development.

The success story of Iceland is the mix of abundant green energy with a bright outlook for the future, decades of experience in renewable energy solutions, a highly skilled labour force with international experience, and not least the steady demand for innovative solutions.

“Tourism has recently become the largest economic sector in Iceland, still before renewable energies and fishing.”

In the PISA study of the OECD five years ago, Iceland was only slightly below average. However, the high value of the education is already evident by the seven universities with a total of around 20,000 students under only 330,000 inhabitants. What measures does your government want to make in this area of education?

The Icelandic authorities are taking the PISA results seriously and have been taking various measures in the past years in order to address the shortcomings. Special emphasis has been put on mathematics and natural science. Training and Continuing education for two ers has been underlined as well as closer co-operation with the other Nordic countries. We have achieved some good results in improving reading skills of younger students and we hope to build on these and transfer them into other fields. A wide-ranging domestic consultation process to that effect will be launched.

More and more young Icelanders are moving to Germany. What are the special projects already here?

Germany is one of our most important partners politically, economically and culturally. One thing we have been doing recently is to develop an informal cooperation between two creative cities Berlin and Reykjavik. We have had three rounds of workshops both in Berlin and Reykjavík bringing together artists, economic operators and civil servants from both cities. The aim is to exchange ideas and create joint projects between the cities. I hope very much we can continue to build on this. Berlin in particular is seen as inspiring by many young Icelanders, and I think you can expect continuing interest. I hope also young Germans will continue to come to Iceland, through the programs like Erasmus.

“Iceland was the first European Country to conclude a Free Trade Agreement with China.”

The Icelandic culture is sprinkled with a lot of legends and myths. In recent years, many musicians, such as Björk, have also attracted international attention. Last summer, your national soccer team and your fans were one highlight of the European Championship in France. What is the culture in Iceland for you? Which artists would you like to highlight?

Iceland’s biggest culture export in recent years was the “Sagenhaftes Island” project at the Frankfurt Bookfair in 2011. In connection with this, 230 new Icelandic books were translated and published in German. This paved the way for many other interesting projects. Since then demand for everything Icelandic has increased year from year here in Germany for which we are thankful. The Embassy in collaboration with Icelandic, Nordic and German partners organizes many large and small projects in Berlin and Germany every year. For instance we have organized a number of events at Felleshus, the Nordic house in Berlin, including: TÖLT, an exhibition on the Icelandic Horse in 2013 which was a part of the International Championship of the Icelandic Horse held in Berlin that year; PLAY NORDIC, a design and music festival, with around 80 Icelandic artists and creative companies participating in 2014; SPARK Design Space and Private Space as a part of the Designmeile in City West with around 40 icelandic designers participating in different projects in 2015, and a 3-month art and music festival in co-operation with MENGI (berlin) art & music space with 30 artists performing at Felleshus last year.

Hooh! (battle call of the Icelandic soccer fans, editor’s note) We are extremely thankful for the very positive reception our National Football Team received in Europe during the EURO 2016 last year. It was sensational for us – public diplomacy in action – where the Embassy granted over 20 interviews in only a few days. We took part in numerous events, including those organized by the Quartier 11 Freunde in Berlin (the fan group) such as "All Eyes on Iceland" at Lido and a cultural event at ASTRA where around 1500 guests attended the game against France. We lost that game, but still we felt like winners. Many were affected by the true spirit of "our boys".

“100 per cent of our electricity is produced from sustainable sources – 60 per cent from hydro and 40 per cent from geothermal”

The culture scene in Iceland is small but very vibrant. Our artists are very open to external influences but also keen to make their own mark. Our Arts Academy is ambitious and our students are encouraged to study abroad. Many of them choose to come to Berlin for further studies. Reykjavik is a hotbed of young musical talent. We also have a new beautiful concert hall and opera house HARPA, which has had a very positive influence on the music scene.

Here at the embassy we try to support Icelandic cultural events every month. I came to Berlin in August 2016 and was already involved in numerous cultural programs and events. I had the privilege of seeing Junius Meyvant and the Rockband KALEO in concerts here in Berlin. The world-class pianist Víkingur Heiðar Ólafsson played at the Elbphilharmonie, where the NDR presented the "Into Iceland music festival” in Hamburg early February, where many wonderful artists performed. And right now we are organizing an event with Egill Sæbjörnsson, a Berlin based Icelandic visual artist who will represent Iceland at the Venice Biannual this year. Shortly after that I will attend the Icelandic film "Into the Volcano" on the Men’s National Football Team which will be an opening film at the 11 mm Film Festival on 30 March.

The world-famous artist Olafur Eliasson has his studio in Berlin as well as the film music composer Johann Johannson, who was nominated for an Oscar last year. You wouldn’t believe the amount of high level cultural event happening around and in cooperation with the Embassy. Finally, I should not to forget there are around 60.000 Icelandic horses in Germany and I consider each one of them to be a fantastic "ambassador" for Iceland. Soon we will start preparing for the next World championship of Icelandic horses in 2019 in Berlin.

“Iceland is continually ranked as one of the most highly developed societies in the world.”

As Iceland's meanwhile largest industry tourism has become an increasingly important sector. Glaciers, volcanoes, geysers or whale watching make the heart of every nature lover beat faster. What tourist highlights would you personally recommend?

Every part of the country has its charm and the diversity of our nature varies a lot. In the middle of the country you can feel the quietness of untouched nature like vast lava fields, the mighty glaciers or powerful rivers. After an exhausting day you can take a dip in a natural geothermal pool. If I were to mention a couple of must-sees, I would single out the Westfjords – Iceland’s north-west corner, which is a world of its own and one of Iceland’s best kept secrets. Isolation has preserved the region in unspoiled wilderness. Largely uninhabited it offers a nature reserve where you can see many rare bird species, the Arctic fox and a unique fauna apart from a rich cultural heritage and the regional cuisine.

The Westman Islands lie off the south coast of Iceland accessible by ferry or plane. The only inhabited island, Heimaey is a major fishing centre. It is a volcanic island and the last eruption took place in 1973 where all its population of 5300 had been evacuated overnight to the mainland. It is surrounded by mountains, puffins and other seabirds, and it has one of the most extraordinary 18 hole golf courses in the world and a state of the art Volcano Museum, Eldheimar.

But let me wrap up my answers by picking up where we started. There is one thing that is very special about Iceland and has not changed in the past 30 years. We still believe in fairies, trolls and invisible elves. We still believe in Nature.

Interview Markus Feller

Pictures: 1, 2, 3, 4, 5, 6, 7, 8, 9 = Mohamed El-Sauaf