Iceland has finally formally applied to join the European Union last Thursday. Yet, on a Thursday in 2002, Joseph Muscat published an article in a popular newspaper, in which he suggested that Iceland does not apply for membership, as was his opinion about Malta. He went on point out the many similarities between the two countries, common factors that substantiated his line of thought, or so he believed.

Some months ago Iceland was deemed as the best place to live in and its economy was regarded as one of the most successful.

Iceland had ousted Norway for the head of the UN’s league table of 177 countries that compared per-capita income, education, healthcare and life expectancy – which, at 80.55 years for males, was third highest in the world.

Iceland, an island of 300,000 people far flung in the middle of North Atlantic, prides itself of a free health and education system. Its inhabitants bought the most books, owned most mobile phones per head and included the highest proportion of working women in the world.

And yet, not only did this island find itself at the centre of the global financial crisis, but it was one of the countries most affected worldwide.

It all dates back from the mid-1990s with the privatisation of the banks and the founding of the country’s stock exchange. The free market reforms unleashed a new generation of thrusting, young businessmen, many of whom had gained their experience in the banking trade in the United States. They were determined that their country would no longer have to rely on fishing for its principal source of wealth; they loathed the international perception of Iceland as a parochial nation of farmers and fishermen who could not hold their own on the world business stage.

With a trio of private banks behind them these entrepreneurs leveraged their strong currency and easy credit into an acquisition spree. Few islanders were rich and it was suddenly very easy to borrow cheap money. For decades one of the poorest countries in Europe, Iceland could finally celebrate as the average family’s wealth grew by 45 per cent in five years. GDP accelerated at between four to six per cent a year and the wealth was invested in property that, in turn, fuelled an unsustainable boom in house prices. In the good times, credit companies sprang up offering 100 per cent loans, many in foreign currency such as the Japanese yen or Swiss franc. Yet several people at the time expressed doubts about the country getting in so much debt but getting rich was a pleasant good feeling nobody would renege on.

It was almost inevitable that when the international credit crisis unleashed the worst financial tsunami the world had seen since 1929, there was little that Iceland could do to repel the shock waves. The government was forced to take over the three biggest banks while making arrangements to conclude aid packages with various countries and the IMF to improve liquidity.

This was not a solitary lament, because many were those who claimed that had Iceland been a member of the EU, this grave crisis could have been averted. They now look at us and wished they had taken the right decision, with a better currency to cushion the effect of the economic turmoil. The problem was they had a great deal of people blindly misguiding them.

This was also what Joseph Muscat, now Opposition Leader, had advocated to the inhabitants of Iceland some years back in a newspaper article, thus freezing his misjudgements in the North Atlantic waters a relic for posterity. Muscat has put the good old days of when he used to campaign wholeheartedly against EU membership behind him now. He portrays himself as miraculously converted in this respect – or perhaps not? There is little doubt, or none at all, that if it were for Dr Muscat, then perhaps Malta would have followed in Iceland’s self-destructive ways. I don’t know about you, but I don’t think I can forget that, or perhaps if I do forget, every once in a while it is healthy to refresh the cold reminder, keeping in mind the volatile line of thought of the leader of opposition.

David Casa is a Nationalist MEP

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www.davidcasa.eu