THERE were fresh hopes today that the two sides in the Icelandic fishing dispute are inching their way towards a settlement.
They met yesterday and are believed to have worked out the basis of a deal with a draft of an agreement ready for signature this weekend.
However, the main stumbling block still appears to be the government’s refusal to grant tax free status to the payment fishermen receive for food and other at sea benefits
The fishermen also met with fisheries minister Kata Katrin Gunnarsdóttir and found that she was continuing to stand firm on the issue of tax credits. The minister, who said she will put forward her own proposals, will discuss the impasse with government colleagues today.
Fishermen currently receive food allowances totalling over two billion kroners a year which are taxed. The government says that if they became tax free it and municipal local authorities would lose around a billion kroners annually.
There is now growing pressure in Iceland for a settlement. The fish catch during January dropped by almost 90 per cent, from 73.200 tonnes in January last year to 7,600 tonnes this year which mostly came from the country’s inshore fleet.
Even if there is a solution this weekend the February loss is likely to be similar because the first catches will not be back until near the end of the month. It means the government has already lost a sixth of its tax revenue from fishing so far this year.
The peak cod and capelin fishing seasons are about to begin and the vessel owners are anxious not to lose out. Yesterday the Reykjavik government raised the capelin quota to 196,000 tonnes, far higher than the figure recommended by the country’s Institute of Marine Research. Capelin roe, which is sold to the Far East, is a major revenue earner for the industry.
The dispute, which is highly complex and involves several different payments, is also affecting the price of cod in the UK and Europe which has risen by 30 per cent since the dispute began almost nine weeks ago. This is certain to be reflected in shop prices especially if fishing does not return to normal soon.