Screening meeting with the European Union on Chapter 17 – Economic and monetary policy – was concluded in Brussels 17 May. At the meeting, which was the latter one of two, experts from Iceland and the EU compared the legislation falling under the Chapter, which is not part of the EEA-Agreement. The Icelandic team was headed by Mr. Már Guðmundsson, Governor, Central Bank of Iceland.
Member States are expected to coordinate their economic policies with the common economic policy of the EU, which aims at ensure economic stability, e.g. by enforce a responsible fiscal policy. New Member States are expected to become part of the Euro-zone, but to be able to adopt the euro, Member States are committed to complying with certain economic and fiscal conditions, the so-called Maastricht Criteria, which pertain to inflation, long-term interest rates, and public finances. The preparation process for adopting the euro by participating in the Exchange Rate Mechanism (ERM II) is one of the biggest challenges in the negotiations on Chapter 17. Participation in ERM II for at least two years is one of the conditions for adopting the euro.
At the screening meeting, attention was brought to the need for further discussions about the settings for monetary and exchange rate matters and a possible support for liberalisation of capital controls in accordance with the Opinion of the majority of the Foreign Affairs Committee of Althingi. Attention was also brought to the government's policy on reducing public debt.