EEA Joint Committee hears briefings on capital controls and TTIP

Published 28-10-2016
The EFTA Standing Committee and the EEA Joint Committee met in Brussels on 27 and 28 October 2016 respectively. The Joint Committee adopted nine decisions incorporating ten EU legal acts into the EEA Agreement.
At the Joint Committee meeting, Icelandic Ambassador Bergdís Ellertsdóttir informed delegates about the recent release of capital controls in Iceland. Capital controls were put in place in Iceland in the aftermath of the financial crisis of 2008, and have been in place ever since. On 11 October, the Icelandic Parliament approved, unanimously, a new bill on lifting capital controls, under which the requirement to present a travel ticket in order to buy foreign currency at Icelandic banks would be dropped at the end of this year.
The new legislation allows individuals to invest ISK 100 million (EUR 800 000) per year in securities, and also to buy at least one property abroad. Outward foreign direct investment will be unrestricted, but subject to confirmation by the Central Bank. A large number of other restrictions were also eased, and further limits will be lifted on 1 January 2017. DG FISMA took note of these positive developments.
“This is a very large step in gaining normality in capital movements to and from Iceland, and in lifting capital controls in full,” Ambassador Ellertsdóttir said. The timeline for full liberalisation is still unknown, as outflow pressure must be manageable. 
Central Bank Governor, Már Guðmundsson, who recently addressed an EFTA seminar, has said that currency reserves, banks and households are resilient enough to these steps. 
The Joint Committee also received an update on the Transatlantic Trade and Investment Partnership (TTIP) from Ms Florina Telea, Trade Affairs Manager at DG Trade. She said that the negotiations would not be completed this year. The European Union would not be rushing into an agreement, and substance would prevail over speed. The next steps would also depend on the new United States Administration. Ambassador Ellertsdóttir said that EFTA appreciated these regular briefings from the EU on TTIP, as the outcome would have an impact on all European economies.
The EEA Joint Committee, chaired this semester by Iceland, is responsible for the day-to-day management of the EEA Agreement. It provides a forum for the EEA EFTA States and the EU to exchange views and take decisions by consensus to incorporate EU legislation into the EEA Agreement. 


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