By the end of this month, Icelanders will vote on whether or not their government should negotiate with the European Commission about joining the EU. The referendum has greater significance for Iceland and the EU than the raw numbers suggest.
The island in the Arctic Circle is smaller than Albania, has fewer inhabitants than Wuppertal and less economic power than Bremen. It wouldn't change much in most EU statistics if Iceland were added. When you look at the world map, things look different. Iceland is halfway between Europe and America. The Arctic, coveted by Russia, China and the USA as a shipping route, raw material reservoir and staging area, is close. Donald Trump wants to annex the neighboring island of Greenland to the United States. The EU has so far had little influence in the region. This could change if Iceland joins.
Iceland broke off accession negotiations in 2013
Another aspect that makes the Icelandic referendum interesting for the EU is psychological. After Great Britain's withdrawal and in view of difficult accession negotiations in the southeast, a speedy process in the northwest could brighten the mood: Look how attractive the Union is for a progressive country.
And what is it like in Iceland? The polls suggest a close outcome of the vote. One detail of the process reveals a lot about the Icelanders' settled relationship with the EU: the referendum is not about the start, but rather about the resumption of accession negotiations, which ran between 2010 and 2013 until they were canceled at Iceland's request.
The Icelandic push for Europe was initially driven by financial hardship. Negligent banking supervision had allowed greedy speculators to bring the country to the brink of bankruptcy; German savers also fell for the temptingly high interest rates that the “Financial Vikings” offered in the late phase of their gambling. When the house of cards collapsed, the EU and the European Central Bank seemed like guarantors of longed-for stability. This attraction waned as Iceland worked its way out of the crisis with international help. Eurosceptics came into government and negotiations were put on hold.
Prosperity and fishing are closely linked
The majority has now changed again, hence the referendum. As a member of the European Free Trade Association, Iceland already has unhindered access to the internal market, just like Norway and Liechtenstein. From an economic point of view, the notoriously high inflation speaks in favor of joining, which would then logically also have to be followed by the introduction of the euro. The Icelandic krona is weak and interest rates are high, which is affecting many young people in the real estate market.
At the moment, however, it is the “No” campaign in particular that is causing a lot of stir. It is supported by the local fishing industry. It's worth taking a look at the Icelandic coins to understand the context. They show, with increasing face value: cod, dolphins, capelin, shore crab, wolffish. The message is clear: prosperity and fishing have always been closely linked on the island.
The most important argument from the “no” side is directed against the EU’s Common Fisheries Policy: Iceland should not let Brussels interfere with the management of its rich fishing grounds. So far, Iceland has been able to operate within a 200 nautical mile wide strip around the island; this area is seven times larger than the island itself.
In the European Union, the Common Fisheries Policy with negotiated access rights and fishing quotas is part of the core tradition. But now even the biggest friends of Europe in Iceland are assuring that the accession negotiations must lead to far-reaching protection of local fisheries. The EU has allowed exceptions in the past, for example for Sweden and Finland in the Baltic Sea, without affecting fisheries policy as such.
Thanks to its exceptional geopolitical position, Iceland should be able to achieve a comparable concession. This is not least supported by the agreed timetable. If the “Yes” side wins now, there will be another referendum in a few years after the negotiations are concluded. The population would then be asked whether they agreed with the result. The Icelanders will not give up their fishing grounds.
