Iceland will hold a referendum on the 29th of August to decide whether the country will reopen talks on joining the European Union, and polls are currently showing the outcome is uncertain, the BBC reports.
At a factory near the coast, workers in blue overalls and hairnets sort freshly caught cod and haddock, and machines process the fish, which will mostly end up in Europe. Pétur Pálsson, head of fisheries at Visir, fears that the price of joining the EU will be job losses in Iceland and factories forced to relocate abroad. He says that if Iceland is in the EU, everything will be decided by Brussels.
On the 29th of August, the nation of 400,000 people will decide whether to reopen accession talks, and polls are showing the outcome is uncertain. EU supporters say closer ties with Europe could help curb Iceland’s currency volatility and rising cost of living. Opponents say the stakes are high for Iceland’s independence and control over its invaluable fishing waters.
The EU has been a divisive issue for Icelanders for decades, but after winning snap elections in 2024, Prime Minister Kristrún Frostadóttir’s center-left government promised to hold a referendum on whether to reopen accession talks in 2027. Russia’s full-scale invasion of Ukraine, escalating rivalry in the Arctic, and U.S.S President Donald Trump’s threats of tariffs and plans for Greenland have prompted the referendum to be rushed.
Iceland is located in the North Atlantic Ocean, on the edge of a strategically important sea area known as the GIUK corridor,
where Western powers are closely monitoring Russian shipping activity. Iceland is a founding member of NATO, but it does not have its own army.
Eirikur Bergmann, a professor of politics at the University of Bifrist, said the outcome was impossible to predict because both sides were using all available means.
Supporters of resuming talks say EU membership would strengthen Iceland’s trade and security positions and protect it from larger powers. They also talk about the advantages of switching to the euro. A vote to resume talks would allow discussions with Brussels to resume, but joining the bloc would require another referendum. If voters reject the resumption of talks, they would be postponed.
Although Iceland is not a member of the EU, it is part of the European Economic Area,
along with Norway and Liechtenstein. Iceland is also part of the single market and the Schengen area.
Reykjavik began accession talks in 2008 after the devastating international financial crisis, but they stalled in 2013. The main obstacle then was fishing, and it remains so now. Fishing and other sea-related industries account for almost 40% of Iceland’s exports, and many who oppose reopening the talks are concerned that the EU’s common fisheries policy could take away control of the tempting fishing grounds. Opposition leader Guðrún Hafsteinsdóttir has vowed not to give up Icelandic waters.
Professor Bergman said fishing was an integral part of Iceland’s cultural and political identity, and no politician would ever give it up, or they would be expelled from the country.
The Icelandic government plans to secure special conditions to protect fishing and agriculture. Meanwhile, eurosceptics doubt that this is possible.
When the BBC visited Keflavík Air Base in August, fighter jets were taking off, and the US flag was flying alongside the Belgian and NATO flags.
Iceland has no army, so its security depends on its NATO allies and a 1951 treaty with the US.
Trump’s repeated threats to take over Greenland and the risk of NATO unity weakening are other concerns that have gripped Iceland. Officials see increased Russian activity near Iceland as a major security threat.
Supporters of the accession talks say joining the EU will offer financial stability, and the introduction of the euro could curb the country’s stubbornly high inflation. Since separating from Denmark in 1944, Iceland has gone from a poor island to one of Europe’s wealthiest nations. However, prices in Iceland are on average 84% higher than the EU average, and interest rates have climbed to 8%.
Skeptics believe that joining the EU will be too expensive.
The referendum on the 29th of August will be closely watched across Europe. If Icelanders decide in favor of resuming negotiations, they could take months, not years, as 11 of the 35 rounds of talks had already been completed when they were suspended.
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