As security fears rise across the North Atlantic and economic pressures mount at home, Icelanders will vote Saturday on whether to restart negotiations on joining the European Union in a referendum expected to be decided by a narrow margin.
The ballot does not ask the country’s 400,000 residents to make an immediate choice on EU membership. Instead, voters will decide whether the government should reopen talks with Brussels and examine the possible terms of accession, including the highly contentious issue of fishing rights.
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“This is an opportunity, it’s not a final decision,” Prime Minister Kristrun Frostadottir told AFP, describing the referendum as a path toward a “risk-reducing ‘Yes’”.
“This way you get a deal on the table, you’re able to see all the questions, the answers to all the questions we get here,” she said.
Voters will be asked to respond ‘Yes’ or ‘No’ to a single question: “Should Iceland resume accession negotiations with the European Union?”
Behind that wording lies a larger debate over whether Iceland should continue charting its own course or tie its future more closely to the 27-member bloc.
The European Union Delegation to Iceland offices in Reykjavik
A ‘Yes’ vote would trigger negotiations with Brussels. Any eventual accession agreement would then be put to voters in a second referendum and would likely require changes to Iceland’s constitution, as well as ratification by EU member states.
Iceland applied to join the bloc in 2009, following the collapse of its banks and economy during the 2008 financial crisis.
Accession talks began in 2010 but were suspended in 2013 after a eurosceptic government took office.
Much has shifted since those negotiations were put on hold.
“The EU is looking around, it’s finishing deals with India, with Mercosur. We’re seeing changes in the global climate when it comes to how people are using tariffs as weapons,” Frostadottir said.
Divisive question
Iceland’s economy has recovered strongly, although its currency remains volatile. At the same time, households are facing persistent inflation and steep borrowing costs. The central bank has raised interest rates three times so far this year, taking them to eight percent and making the euro an appealing prospect for heavily indebted families.
Beyond the economy, Russia’s invasion of Ukraine and the return of war to Europe have unsettled long-standing assumptions about security.
US President Donald Trump’s threats to take over neighbouring Greenland have deepened those concerns. Iceland occupies a strategic position in the sub-Arctic, has no military of its own and relies on NATO and a 1951 bilateral defence agreement with the United States.
“The geopolitical upheaval that we have seen recently is not the root cause of this referendum. But obviously, those concerns are impacting the debate,” Bifrost University Professor Eirikur Bergmann told AFP.
“Mainly the aggression towards Greenland has caused great concern in Iceland and caused many people here to pause and reassess where Iceland belongs,” he added.
Opinion polls indicate that the electorate remains sharply split over the country’s relationship with the EU.
Office worker Vilborg Inga Magnusdottir said she saw little reason to abandon the current arrangement.
“Why would we want to enter the European Union? What would we benefit from it when things are already good?” the 33-year-old told AFP.
Hrafnkell Gudnason takes the opposite view and plans to vote ‘Yes’.
“It’s getting more dangerous for a small country to stand outside the EU,” said the 59-year-old consultant and horse-breeder.
“I think it’s safer to be a part of a bigger family.”
Compromise on fishing?
Fishing would almost certainly dominate any future negotiations. Seafood products account for around 40 percent of Iceland’s goods exports, while the industry remains closely bound to the country’s national identity.
Half a century after Iceland’s last “Cod Wars” with Britain, many citizens remain unwilling to surrender even limited control over the waters they fought to secure to Brussels.
Foreign Minister Thorgerdur Katrin Gunnarsdottir, a staunch europhile, has also said Reykjavik would demand “sovereign control over all fisheries” in any renewed negotiations.
That position would be difficult to square with the EU’s existing Common Fisheries Policy.
Brussels has largely avoided intervening in the referendum debate but has sent encouraging signals, including on the politically sensitive question of fisheries.
For the EU, bringing in a wealthy and stable country that is already deeply integrated into the single market through the European Economic Area would offer a powerful example of its enlargement policy and reinforce its position in a strategically important region.
