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Already a member of NATO, the European Economic Area (EEA), the single market and the Schengen Area, for decades Iceland has debated whether or not it should become a full member of the European Union.
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Fears for the fishing and farming sectors are the focus of the Eurosceptic messages. Opposition to the EU in rural areas is up to 80%, according to some polls.
Farmer Stefán Geirsson markets milk and beef from the country’s agricultural heartland. Full EU membership would mean an avalanche of cheaper agri-food imports, with which farmers here would simply be unable to compete, he fears.
“We have examples from Finland where the farmers’ price for their products dropped 40% when they joined the EU and many farmers went out of business. If we lose the market, I think no subsidies can make up for that,” he says.
Fishing is the other openly Eurosceptic main economic sector. Seafood activities accounts for some 8% of the country’s GDP and 4% of its workforce. Ágúst Jóhannesson works on a trawler fishing for cod and haddock. EU quota systems would hurt the fishing industry he claims. “And then, the majority of the fish companies are family owned,” he adds. “If there is an open market throughout Europe, it is really easy for European companies to buy themselves into it. Our fishing industry will never come to an end. But it is going to change.”
Already some 75% of Iceland’s laws are in line with EU legislation across the social, environment and economic sectors. “There is no need for more,” says Haraldur Ólafsson, founder of the country’s main Eurosceptic group. “The economy of Iceland is based on natural resources. It’s not highly industrialised as in Central Europe. And to some extent, the culture is also different. There is, for instance, no military tradition in Iceland whatsoever. And it’s going to be very, very costly be a member of the European Union.”
Economic stability is one of the cornerstones of the pro-European campaigners. The national currency has historically been prone to sudden devaluations with huge economic impact, including high inflation. Interest rates here are around three times higher than those set by the European Central Bank.
Full EU membership and the adoption of the euro would be the best solution to guarantee economic stability for generations to come, according to Polish-born MP and Chairman of Parliament’s Foreign Affairs Committee, Pawel Bartoszek.
“(Full EU membership contribution) would mean 10 or 15 billion krona each year. Just the savings for homes when it comes to lower interest rates would maybe save Iceland’s consumers 100 billion krona a year. The benefits for homes and consumers are of such magnitude that it’s very easy to justify this cost,” he explains.
New international geopolitical realities are greatly weighing in on the debate. Conflicts in Ukraine and the Middle East and mixed signals from the U.S administration have given rise to a growing feeling of isolation. University professor of Political Science Magnús Magnússon is the Chairman of a platform advocating for closer ties with the EU.
“We are under constant attack from Russian bots and Russian misinformation and all sorts of actors trying to influence our infrastructure, attacking our websites, attacking our energy infrastructures. And they need to be secured. So there’s a lot of things that the EU can help with in that respect,” he says.
Pro-European advocates also argue that, while subject to and aligned with countless EU policies, Iceland is outside EU institutions, thus losing influence on policy making.
Dagbjört Hákonnardóttir is an elected MP for the ruling Social Democrat Alliance. The current government’s unequivocal backing for the EU is the best way to defend the interests of Icelanders, she says. “We have zero influence now. This has to do with inner market issues. This has to do with energy, with environmental issues. These interests are not being secured by Icelandic officials,” she concludes.
The volcanic island sits on very active geological – but also political – tectonics that are relentlessly shaping its future.
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