Iceland's EU Referendum: A Brexit Echo on the Horizon?

As the UK marks the tenth anniversary of its fateful Brexit referendum next Tuesday, Iceland is fast approaching its moment of truth about the EU – albeit from the opposite direction.

On 29 August, Icelanders will be asked whether or not to they want to come back to the table with Brussels for negotiations about joining the EU. Iceland originally applied in 2009 after the financial crash, but pulled out of talks in 2013 saying it couldn’t go any further without a referendum.

Now, after more than a decade on hold, membership talks are back on the agenda. When I met Iceland’s youngest ever prime minister, Kristrún Frostadóttir, last year she said she expected a referendum in 2027 as a “necessary step forward”.

But that was before Donald Trump’s threats to invade Iceland’s closest neighbour Greenland. Iceland’s government, no doubt driven by the sudden geopolitical focus on the Arctic, announced that the referendum would be brought forward.

While fear of invasion by a US president who appears to have difficulties distinguishing between Iceland and Greenland, has convinced some Icelanders of the need to join the EU, the island is divided. And on both sides of the debate, Brexit has become a watchword.

For the pro-EU camp, British Leave campaign misinformation and the sense that the UK hasn’t exactly flourished since its exit from the EU are evidence for why the Nordic country should do the opposite. “I am fearing that we will face a Brexit moment,” Iceland’s pro-European foreign minister, Þorgerður Katrín Gunnarsdóttir, told me recently, referring to the disputed claims used by the leave campaign in Britain for how much money the UK sent to the EU. Brexit, she said, “should be an example of how not to run a campaign.”

In the Eurosceptic camp the UK’s struggles to leave on its terms are presented as very good reasons not to join. “The EU wanted to make Britain’s departure as painful as possible,” Haraldur Ólafsson, from anti-EU group Heimssýn, told the Reykjavík Grapevine. “What is lost in one day can take many hundreds of years to get back.”

‘The loudest voices are probably the most extreme’

While public debate over the issue is starting to gather momentum, polls show that the pro-EU campaign has a lot of work to do to convince voters. Iceland, like Norway, is already a member of the European Economic Area (EEA) as well as the Schengen passport-free travel area. But a recent Gallup poll found 54% opposed joining the EU and 46% in favour. Another poll found that 53% would vote yes to resuming talks and 47% said no.

Even if Icelanders vote yes they will, in contrast to the UK experience, be given a second referendum on whether or not to accept any terms of entry negotiators return with.

“Of course the biggest question is always about the fisheries, but the EU has hinted that there could be an exemption for Iceland in that regard,” Freyja Steingrímsdóttir, executive director of the Association of Icelandic Journalists told me. Fishing is of phenomenal value to Iceland: the total value of fisheries assets for 2023 were put at 1,059 bn Icelandic Króna (about €7.3bn).

The other big discussion point is the euro, Steingrímsdóttir stressed. “Iceland has a history of high inflation and high interest rates and a very unpredictable economy and probably more Icelanders would like to join the eurozone than actually the EU.”

While the question in August’s referendum is in some ways hypothetical, the financial and emotional cost of voting in favour is very real.

Hulda Þórisdóttir, a politics professor at the University of Iceland, says this is already shaping up to be a very contentious referendum that is far more complicated than a left v right divide. There is, she says, support for the EU on both sides of the political spectrum. “The loudest voices are probably the most extreme voices,” she tells me. “The vast majority of ordinary people who are trying to weigh the pros and cons may be feeling a little bit lacking in good information.”

And then there are the domestic and international forces at play – in tandem with the election-altering potential of AI tools. As experts have warned, Iceland may struggle to ensure that voters have clear and correct information about the vote.

In addition to fishing, the arguments against joining the EU include agriculture, fears about maintaining the high living standards of a progressive country – a world leader on equality – and Iceland’s relationship with the US.

‘This idea of a hard fought independence is very much still alive’

The most emotive argument however, is arguably that of sovereignty, which is baked into the Icelandic sense of self. Recent events in Greenland have only reminded Icelanders of their potential vulnerability.

“This idea of a hard fought independence is very much still alive with the Icelandic national soul,” says Hulda Þórisdóttir. Iceland only gained full independence from Denmark in 1944.

But the argument works both ways. Pro-EU campaigners argue that only a strong alliance with like-minded European nations can strengthen Iceland’s sovereignty. A sense, says Þórisdóttir, that “we are alone at sea” if not inside the EU.

Flying between Reykjavík and the Greenlandic capital Nuuk on a tiny plane being tossed around by the elements in January, it was difficult to think about anything other than quite how alone and at sea both islands are. Whether or not Icelanders vote to restart EU negotiations this summer, Brussels and continental Europe will remain – geographically at least – very far away.