Iceland comes in from the cold?

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Iceland comes in from the cold?

The next application for EU membership may come
from a somewhat surprising direction. While the enlargement process
understandably focuses on the south and east, things may be
stirring on the North-western periphery of the EU. According to a
recent opinion poll in Iceland, 91% of Icelanders want its
government to initiate negotiations for accession to the EU, up
from 68% a few weeks ago.

Things have been stirring for months. There has
been a growing disenchantment with the political aspects of the EEA
Agreement, which incorporates Iceland, Norway and Liechtenstein
into the EU’s internal market without them being members of the EU.
In practice this agreement obliges these three countries to adopt
acquis communautaire without however having any influence
on its formulation. This ‘democratic deficit’ has prompted Foreign
Minister Halldor Asgrimsson to call for an ‘update’ or ‘upgrade’ of
the agreement to allow the three EEA states a greater say in the
formulation of new rules and policies. This would surely be
rejected by the EU, which has neither the time nor the inclination
to jeopardise its decision-making autonomy in order to placate
countries that are not interested in full EU membership.

Commentators speculate that Mr Asgrimsson’s
initiative may be no more than positioning ahead of general
elections next year. The current coalition government is dominated
by Prime Minster David Oddson, the longest serving prime minister
in Europe and an opponent of EU membership for Iceland. Mr Oddson’s
centre-right Independence Party is however divided on the issue,
and other important parties in Iceland, such as the Progressive
Party led by Foreign Minister Asgrimmson appear to be increasingly
in favour of negotiating EU accession. Members of the main
opposition party, the Social Democrats, are expected to vote in
support of a programme calling for EU membership at a party
congress later this year. Elections are due before May 2003.

But even if Iceland applies for EU membership,
the result is by no means a foregone conclusion. More than for most
countries, the outcome of a referendum on membership would depend
on the result of negotiations, in particular concerning the
fisheries sector. The key concern in Iceland is that it would lose
control over its fishery resources, politically the most vital
sector of the Icelandic economy, if it has to adopt the Common
Fisheries Policy (CFP) of the EU. The importance of the negotion
per se is reflected in the aforementioned poll, where as
many as one-third of those calling for membership negotiations are
in fact against EU membership for Iceland!

The reform of the CFP due at the end of this
year will therefore be pivotal. Hitherto, it has been assumed that
Iceland would need an exemption from the CFP in order to vote for
EU membership, and that no such exemption is on offer from
Brussels. However, Icelanders are becoming increasingly aware of
the problems caused by the partial exclusion of fisheries from the
EEA agreement. In a speech last week in Berlin, Foreign Minister
Asgrimsson claimed that Iceland’s fishery interests could be
accommodated with a special Icelandic regime within the CFP, rather
than through a permanent exemption from the CFP.

An Icelandic application would also give the EU
the opportunity to retreat from one of the more embarrassing
sections of the Nice Treaty with dignity. The division of seats in
the European Parliament at Nice gave current member states Greece,
Belgium and Portugal 22 MEPs each, while the Czech Republic and
Hungary, with exactly the same population, were allocated only 20.
But the Nice numbers were calculated on the basis of a ceiling of
732 members of European parliament and 27 member states. The four
or five additional MEPs who would be allocated to Iceland are
enough to take the European Parliament above the threshold set at
Nice, which should lead to a recalculation and improved calibration

An Icelandic application for EU membership could
also initiate a knock-on effect leading to more applications. The
debate on Iceland is watched with some trepidation by the Norwegian
government, which consists of both opponents and supporters of EU
membership who have agreed to dissolve the government if there is a
new debate on EU membership. Looking further afield, Croatia, as
the most advanced of the Western Balkan countries, is eagerly
awaiting a favourable opportunity to lodge its accession

It is improbable that Iceland could apply to the
EU in time to conclude negotiations at the same time as the ten
states currently expected to join in 2004. More likely an Icelandic
application will come after the elections due in May 2003; if the
negotiations proceed at the same rapid pace as did the fourth
enlargement, Iceland could well be ready for membership before
Bulgaria or Romania, and certainly before Turkey. Icelandic EU
membership would also further exacerbate the asymmetries of the
multilateral EEA, with potentially only Norway and tiny
Liechtenstein left on the EFTA side. This would surely raise
further questions about the viability of the complex institutional
machinery of the EEA agreement, which is discussed in a

recent CEPS report. Under the
EEA agreement, Brussels has had a considerable effect on Icelandic
life with few institutional consequences for the EU. That may be
about to change.

Marius Vahl and Nicholas Whyte

For more CEPS analyses, see the

CEPS website.  

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