Iceland's EU Referendum: Sovereignty, Economy and Fisheries on the Agenda

In the run-up to the referendum, opinion polls show a close race between the yes and no sides. 51.5 percent are in favor of the resumption of negotiations according to an opinion poll conducted by Icelandic Gallup in the first part of August.

If the majority votes yes on Saturday, there will be another referendum if and when a accession agreement is on the table.

Among those advocating a new round of negotiations with the EU is Magnús Árni Skjöld Magnússon, Chair of European Movement Iceland.

"Iceland's interests would be better served inside the European Union because the country is already deeply integrated into the European single market through the EEA Agreement, while having limited influence over many of the rules it ultimately adopts. EU membership would give Iceland a seat at the table where decisions affecting its economy and society are made," Magnússon says to High North News.

More or less power?

On the barricades against further exploration of membership in the EU is Haraldur Ólafsson, leader of the organization Heimssýn.

"This is about government by the people. We want Iceland's elected representatives to retain power. It would entail a major step away from democracy and sovereignty if we handed state power over to people abroad. The laws and rules made in Brussels are adapted to the needs of continental Europe, whereas Iceland has different needs," says Ólafsson to HNN. 

"Iceland is a small society located far from major markets, with an economy largely based on the use of natural resources. The economies of EU countries, on the other hand, are largely based on highly developed industry. This is a significant difference that may lead to conflicts of interest when it comes to foreign trade. For example, the German economy has a far greater need for tariff barriers than the Icelandic economy," he elaborates.

The main points of contention

Sovereignty and the economy are key points of contention in the Icelandic EU debate, alongside fisheries, outlines Gudbjörg Ríkey Thoroddsen Hauksdóttir. She is programme director at the Centre for Arctic Studies and a PhD fellow at the University of Iceland.

"The no side argues that, as an EU member, Iceland would be bound by decisions made by bureaucrats in Brussels, and that we would essentially give up the sovereignty we fought so hard for. The yes side claims the opposite: Iceland already adopts EU policies through the EEA without having voting rights in the union. Therefore EU membership would essentially increase our power, not cause the loss of power," she tells HNN.

Regarding the economy, Hauksdóttir describes the positions of the two camps as follows:

"The yes side argues that EU membership and adopting the euro would stabilize Iceland’s economy, lower interest rates and make housing more affordable. Currently, interest rates stand at 9.5 per cent, housing is very expensive and food is also costly, Hauksdóttir describes, continuing:

"The no side maintains that Iceland’s current economic situation remains strong, that Icelanders are among the happiest people in the world and that the country is very safe. The yes side argues that we cannot rely on this situation to last forever, especially in light of the ongoing trade war and geopolitical tensions on the rise."

Control over fisheries

This spring, EU Commissioner for Fisheries and Oceans Costas Kadis opened the door to granting Iceland exemptions from the union’s common fisheries policy.

While the no side rejects the possibility of obtaining meaningful exemptions, EU supporters believe that Iceland can negotiate arrangements that would allow it to retain control over its fisheries, Hauksdóttir outlines.

"Maintaining control over the fisheries is very important to Icelanders. Iceland gained independence from Denmark relatively recently and later confronted the United Kingdom in the so-called "Cod Wars" over fishing rights and the expansion of its fishing jurisdiction."

"Control over marine resources therefore has both economic and symbolic importance and remains closely connected to Icelandic identity and ideas about our independence. The minister for foreign affairs has also stated that full control over Iceland's fishing grounds is non-negotiable," she points out.

Trust and distrust

Magnússon of the European Movement Iceland acknowledges that fisheries are a challenging issue, but believes that negotiations with the EU can lead to a good result in this field as well.

"There is often a perception in Iceland that EU membership would automatically mean surrendering control over fisheries. The reality is more nuanced. Any accession agreement would have to address Iceland's unique position as a coastal state with extensive fishing grounds and a highly significant fishing sector. The precise outcome would depend on negotiations, but I would expect Iceland to seek safeguards that protect both sustainable resource management and the economic importance of the sector," he says, continuing:

"It is also worth noting that Iceland's fisheries management system is widely regarded as effective and sustainable, and this would form an important basis for negotiations."

Ólafsson in Heimssýn, however, is sceptical of it all.

"Even if there were to be a temporary period during which Iceland could decide over its fisheries, we cannot know what the EU might do in five or ten years. We would run an incomprehensible risk by handing over power and Iceland's most important resource to the EU," he believes. 

Security policy

The serious security policy situation and Trump's threats to annex Greenland, Iceland's nearest neighbour, also influence the Icelandic EU debate, but are overshadowed by domestic issues, Hauksdóttir says.

"The Greenland crisis is definitely a factor in the debate, but it is nevertheless mostly focused on the economy and sovereignty. The yes side argues that EU membership would provide Iceland with an additional layer of political and economic security at a time of growing geopolitical uncertainty and questions about the future of the transatlantic relationship," she outlines, continuing:

"The no side, by contrast, argues that the EU cannot replace NATO when it comes to Iceland's defence. The disagreement is therefore about whether EU membership should be understood as an important additional security framework, or whether Iceland's existing NATO membership is sufficient."

Ólafsson in Heimssýn is not worried about the behavior of Trump's USA.

"The Americans are interested in military bases and a friendly government, and they have all of this in Iceland. They have had it for 75 years, and have not expressed any desire for anything more," he says.