Dan Hannan on Iceland

Sadly the financial crisis continues to hit Iceland hard as it battles to keep its head above the water, seeing its currency collapse and desperately seeking foreign loans, while West Ham's owner Bjorgofur Gudmundsson is, according to the Daily Telegraph, facing the collapse of his Samson Holdings company, having already lost £230million.

Meanwhile, several prominent Icelanders, including possibly Iceland's most famous national, Bjork, has called for the country to join the safe haven of the EU and the euro, the idea of which will appall Tory MEP Dan Hannan.

A long time fan of Iceland, Hannan spent his stag night there so he could enjoy himself outside the EU (though obviously not outside most EU regulations, which Iceland follows as a member of the EEA, though with no say in shaping them).

And well done to the Fabian's Next Left blog which has dug up an astonishing article Hannan wrote for the Spectator in 2004.

In it he writes: "Being outside the EU, Iceland has been able to cut taxes and regulation, and to open up its economy. For 70 years the Althing has been dominated by the splendidly named Independence party, which has pursued the kind of Thatcherite agenda that is off limits to EU members...

"They understand that there is a connection between living in an independent state and living independently from the state. They have no more desire to submit to international than to national regulation. That attitude has made them the happiest, freest and wealthiest people on earth. Long may they remain so."

Quite spectacularly wide of the mark!

Eurosceptics who call for Britain to withdraw from the EU often suggest that we would be better off just being a member of the European Economic Area (EEA), like Norway, Iceland and Liechtenstein.

I’ve always found this a strange argument because the EEA simply extends the single market to these non-EU countries but as non members they do not have a vote on any of the legislation which sets the rules for that market and which they incorporate into their own law. If they don't like an EU propsal, there is precious little they can do about it.

This is a point that Eurosceptics who constantly fret over Britain’s supposed loss of sovereignty might like to consider.

Furthermore, EEA countries are also required to contribute to the EU budget, with the most recent cost to Norway estimated to be around a billion euros over five year.

Calculating in population terms Britain's contribution in that situation would be about 13 billion euros over five years, but also not getting any back through EU spending in Britain!

So realistically, if Britain did ever leave the EU we would inevitably have to sign trade agreements with the EU (which is, after all, where most of Britain's trade is) and then abide by rules we had no influence over and pay for the privilege!