Iceland Case Wake-Up Call for the EU

• 03.16.2015, 18:30
•  Europe,  "Insight" Analytical Center ,  World

The sudden refusal of Iceland to further proceed with the EU membership negotiations, which were frozen since 2013 was a shock for everyone inside and outside the Union. The Foreign Minister of Iceland Gunnar Bragi Sveinsson gave a short notice to the current EU president Latvia and the European Commission about the cabinet's move.

"The doors remain open for Iceland" - the EU spokeswoman Maja Kocijancic announced as Iceland gave no reason for dropping its bid to join the 28-member bloc.

It seemed like the EU was not so much surprised by this move which became a moment of perplexity. Although taking into account nowadays’ political, economic and social hardships that the Union is facing with Greece, Great Britain, France, Italy and the Eastern members, Icelands’ move was natural from the point of self-defense. So can this move be named another wake-up call for the European Union?

First, let us get back to the roots.  Being already a member of European Economic Area (EEA) since 1970, associated member since 1994 and a member of Schengen zone since 2001, Iceland applied for European Union membership in 2009. After long bureaucratic procedures on March 12, 2015 the Foreign Minister of Iceland informs about withdrawing the membership application.

From 2008-2011 strengthening of the financial crisis and instability of national currency forced the nation to start thinking about joining the euro. However, in order to become a eurozone member a country should first of all be an EU member. It seems that today Iceland is more glad that it did not accept the euro at that time: the country is experiencing economic growth - 1.9 percent during the past 2014.

The fact is that Iceland applied to join the bloc when it needed the Union's support. The country supposed that joining the eurozone would bring stability and economic protection.  After the country’s candidacy was approved in June 2010, the euro started suffering its' own crisis, whereas the economy of Iceland started to recover step-by-step. The public opinion turned to be against the EU membership: being a member of Schengen area and the EEA, Iceland already had an access to the EU’s single market with no tariff barrier for its fish and agriculture products.

By that time  the new government froze the accession talks in 2013, 27 of the 35 legislative chapters had been opened and 11 concluded. But disputes remained on several issues, mainly those regarding agriculture and fisheries. Common Fisheries Policy was always a continued sticking point between Iceland and the EU.  It is currently under the EU acquis controls which states can catch what kind of fish and in what amount, while Iceland has long claimed that its own system, which did not comply with the EU regulation, was better for business and for preserving fish populations.

According to surveys conducted by Eurobarometer, by the time of the start of official negotiations 54% of the population rejected Iceland becoming an EU member state and 30% were for it.  At the same time the survey gives a number of 84% of population who thought Icelandic food producers will face more competition from those in other EU countries and 72% agreed that Iceland’s interests will be harmed by the EU’s fishery policy.

In a way, the aforementioned could become an opportunity for the EU, however the bureaucracy, as in many other cases became an obstacle. Could this be considered a win-win situation? At the times of negotiations it could, but now it is definitely not the case. As the country’s Foreign Minister, Gunnar Bragi Sveinsson wrote on his website "Iceland’s interests are better served outside of the European Union".

According to January, 2014 poll, 67.5% of Icelanders support holding a referendum on whether to continue accession negotiations, or not. While another poll of February, 2015 showed that 82% are in favour of holding the referendum. In February, the governing parties agreed to formally withdraw the membership application, without first holding a referendum on the matter, and submitted a bill to Althing (Icelandic parliament) seeking their approval for this move.

Under Icelandic law, it is not the Government but the Parliament which decides to end negotiations. That is why when Foreign Minister announced that he had sent a letter to the EU on withdrawing the application for membership, without the approval of the Althing, the European Union stated that Iceland had not formally withdrawn the application.

It is worth mentioning that in EU history there are cases of withdrawing or rejecting the accession talks: Switzerland froze the application of joining the EEA in 1992, because the public opposed (in a referendum 50.3% of the population responded against ratifying the EEA membership agreement); Norway's EU membership, which was first vetoed by the UK, was in 1994 rejected by the population via referendum.

Taking into consideration all these, we must assume that in order to annul official membership negotiations the country needs to hold a public referendum, reflecting the will of the population. In this case taking into account the data of the Eurobarometer starting from the year the country launched its negotiations, the outcome of the referendum is very much likely to be for annulling the continuation of negotiations.

It is important to stress the fact that in case of success this may become a bad precedent for today’s official candidates (Albania, Macedonia) and already negotiating states (Serbia, Montenegro, Turkey).

On the other hand a small percentage of the people for Iceland's EU membership tries to make its voice heard: after the government dropped the membership negotiations some 7,000 Icelanders took the streets of Reykjavik on Sunday to protest against the government’s decision to drop its bid for EU membership.

Since coming into power in 2013, Iceland’s coalition government has been fervently against joining the EU, and last January it attempted to withdraw its membership bid but was forced to halt its plans when people took the streets in protest against the decision being made without a referendum.

As for today, it seems like there is nothing left for the Union except naming this announcement a sovereign decision of Iceland and emphasizing the importance of continued strong relations and cooperation between Iceland and the EU. The time has come for the European Union to change its policies, stregthen its decision making processes and become more flexible in relations with third countries. Each country is unique in its needs and interests, be it in or outside the Union.  Otherwise, in the existing economic and political  crisis,  the Union is running the risk of losing the countries that are now seeking membership.