Icelandic Ambassador Talks Economy in Berlin Skip to content

Icelandic Ambassador Talks Economy in Berlin

By Iceland Review

By Simone Kussatz, photo by Frank-Michael Arndt of frfocusmedia.

In a meeting with the German press at the Icelandic Embassy in Berlin on Wednesday, Ambassador Ólafur Davídsson announced that according to economic prognoses, Iceland will face a ten percent drop in its gross domestic product next year.

Iceland’s unemployment rate is expected to increase to ten percent, while it only measured one percent in 2001, he explained.

The financial crisis will mostly affect young Icelanders holding high-paying jobs, the ambassador stated, who will now have to face unemployment in the near future which will run up their debts.

Economists also predict that the elderly population will continue losing parts of their savings, but that Iceland’s retirement system will not be shattered.

Ambassador Davídsson also gave a brief summary of Iceland’s 1000-year history, mentioning the settlement of the Vikings in 874 and Iceland falling under first Norwegian and then Danish rule until 1944.

He then discussed World War II when Iceland was under British and American occupation. After the war, Iceland became a member of the UN, a charter member of NATO, a member of EFTA and the EWR and signed the Schengen agreement in 2001.

Due to the financial crisis and Iceland being part of European culture, the natural next step is membership to the EU, Davídsson said, mentioning that negotiations will start within the next year and a half.

Despite all the changes that have taken place in the country since the economic collapse, fishing will remain the biggest earner of foreign currency, Davídsson stated.

Davídsson emphasized Iceland’s important role in the world of literature, mentioning its sagas from the Middle Ages. They are not only prose, he said, but, despite their fictitious nature, play an important role in historiography and in how the Icelandic people see themselves.

“Icelandic people define their culture through literature. We have the great heritage of the sagas. Other domains of culture, such as music and fine arts came later. And then we received acknowledgment in the more modern domains of culture such as film, fashion and design,” the ambassador said.

In 2011 Iceland will be the honorary guest of the Frankfurt Book Fair and for that reason, the complete saga collection is currently being translated into German.

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