Global Economics

Icelanders Question Merit of EU Bid


The government of Iceland is moving forward on an effort to join the European Union, but a growing number of the island's citizens don't like the idea

Iceland this week appointed its chief EU accession negotiator, but the country's application is already hitting the buffers domestically and Brussels fears that the Arctic nation may "pull a Norway", meaning an application that the government is sincere about, but which the people strongly reject.

The country's finance minister, Steingrimur Sigfusson and leader of the government's junior coalition partner, the Left Green Movement, said last Tuesday at a meeting of the Nordic Council in Stockholm that while Iceland had applied to join, the people did not want to become members of the EU, a statement that has not been met with great enthusiasm in Brussels.

On 1 November, the former Social Democratic foreign minister of the country, Jon Baldvin Hannibalsson, one of Iceland's biggest supporters of joining the EU, told a meeting at the University of Reykjavik that accession would probably be rejected in a referendum and criticised the current government as providing weak leadership.

On 1 November, the former Social Democratic foreign minister of the country, Jon Baldvin Hannibalsson, one of Iceland's biggest supporters of joining the EU, told a meeting at the University of Reykjavik that accession would probably be rejected in a referendum and criticised the current government as providing weak leadership.

"It's an interesting opinion from a high-level representative of the country, but it is nothing we have to consider and does not affect us in fulfilling our task," acting commission enlargement spokesman Amadeu Altafaj told EUobserver, commenting on the words of the finance minister.

"But let's put things in perspective," he warned. "It was Iceland that applied for membership, not us that requested that they apply."

"Remember Norway under the Santer commission, we got as far as a designated commissioner from Norway, they were going to have the fisheries portfolio, but it never happened. It's something that could happen here: It's called democracy."

The commission has workers stationed in Iceland tasked with political and media monitoring, translating all material relating to the debate on EU accession. It is the product of these monitors that has Brussels worried, as the tenor of the discussions suggests the government is losing the case.

EU member states first have to give their okay before official negotiations can begin and could reach a deal in December on talks starting in the first quarter of 2010.

"But the deal is very tentative," said one EU official.

"There are concerns about the stability of the government, not just on the question of accession but also on the tough economic and social measures that are necessary."

On Monday (2 November) Iceland's ambassador to the EU, Stefan Haukur Johannesson, was appointed chief negotiator in the upcoming accession talks.

Mr. Johannesson told this website that Brussels officials have been querying him about the public's attitude and what exactly is the government position, but he said he explains that the debate is "evidence of a thriving democracy, and I think they understand this."

"Iceland will be a hugely important partner if we join, contributing to the EU's geographic completeness," he continued. "The northwestern flank will be added, which is key in the age of climate change and when the EU is starting to develop its own Arctic agenda."

The EU is keen to get a toehold on the Arctic, with its enormous oil and gas potential and shipping possibilities via Northwest Passage. The bloc itself has no territorial access to the pole. With Iceland on board, the EU would instantly be on the Arctic Council. Attempts at winning permanent observer status with the Arctic Council have been blocked by Canada.

Government divided, opposition hardening

Iceland's governing coalition is divided over the EU application. The normally euro-sceptic Left Greens gave their okay to moving ahead with negotiations in order to join the government, but much of their membership has not reacted well to the decision and MPs are under pressure from local branches of the party. Some analysts are speculating that it could split the party in two, with the more environmentally minded wing of the party the more pro-EU.

But the EU question is not the only point of fragility. The centre left Social Democratic Alliance and their far-left coalition partners are also split over what attitude to take toward energy-intensive industries and a range of other policy issues.

Moreover, all parties apart from the Social Democrats are having internal wrangles over the subject of EU accession. It is far from certain if the government were to fall that any new coalition would continue with the application process.

On Friday, a poll carried out by the Research Center of Bifröst University for the TV channel Stöð Two found that 54 percent of Icelanders now oppose membership while only 29 percent are in favour, with 17 percent uncertain.

The survey suggests that opposition to joining the bloc has hardened in the last few months, as a poll in August had EU supporters on 34.7 percent and opponents on 48.5 percent. In September, another poll put backers of accession on 32.7 percent and opponents on 50.2 percent.

At the height of the crisis, polls had reported that some two thirds backed adhesion to the EU.

Even the leaders of the Evropusamtokin, the European Movement in Iceland, who will be leading the Yes campaign should there eventually be a referendum, believe the debate has taken a turn for the worse.

"The [European] Commission is monitoring things quite closely. They know there is a very negative feeling about the EU after the Icesave issue," Andres Petursson, Evropusamtokin's chairman told this website.

"There's such a demagogic discussion right now. If this does continue for the next two years, then the commission should be worried."

Icelanders are furious at moves by the UK and the Netherlands to block a second tranche of IMF funding to the north Atlantic nation until a resolution of repayment of debt of Landsbanki's collapsed Icesave savings accounts. Although a deal has now been reached with Reykjavik, people see the EU as siding with London and the Hague.

Prime Minister Johanna Sigurdardottir, a strong supporter of EU accession, in September acknowledged that the deal is unpopular in her country and viewed as unfair and said she would not back "a solution that forces hardship on Iceland and Icelanders."

Mr. Petursson says that people are also still smarting from the decision of the British government in 2008 to employ anti-terror legislation to freeze the UK assets of Landsbanki.

"It was very bad what the British did with the anti-terrorist act. There's no way they can justify that," he said. "You cannot imagine how angry people were, and people here are mixing this up with the EU."

"And people are still very angry. They don't know who they should be angry at, so the EU has turned into a sort of scapegoat," he added. "There's anger at everything foreign - the Brits, the Dutch, the IMF, the EU. They make no distinction."

Ambassador Johannesson, for his part, wanted to distance his government from suggestions that relations with the EU, and the UK and the Netherlands in particular, were fraying over the Icesave controversy, or that the dispute could be responsible for any delay in getting the nod from the Council.

"The member states have been extremely supportive," he said.

He believes if there is a delay to the start of negotiations, this will only be due to procedural concerns. "It is a lot of work."

"Obviously we would be very happy if the decision were taken in December, but if it's early next year, it's not the end of the world."

After the crash

Mr. Petursson believes that both Iceland and the EU should actually take their time in negotiating, as it will be a long while yet before the Icelanders get over the "shock" of the economic collapse.

"I do think we'll be able to turn [opinion] around. In another six to eight months, there will be a more reasonable atmosphere," he said. "While the polls do not look good right now, there's been a clear trend since before the crash, since 2005 toward not just opening of negotiations with the EU but joining as well."

"It's like a person who's been in a very serious accident in a cheap car. As they're trying to pull themselves out of the wreckage, it's not always the best time to tell them that they should buy a Volvo. They've got other things on their mind."

"With time, people will begin to control their anger and then vote rationally and not emotionally."

The anti-EU movement on the island, Heimsynn, argues the reverse: that it was the crash that temporarily pushed the population to embrace the EU and that now that there has been some distance from the crisis, they are settling back into their default eurosceptic position.

"With the banking collapse, there was a panic. a huge majority wanted to join the EU. Those in favour saw the opportunity to advance their goal," Heimsynn spokesperson Hjörtur Jónas Guðmundsson told EUobserver.

"We're only 320,000 people. How is it possible to influence decision making according to that?" he continued. "We are a small society - you can meet the prime minister on the street, send an MP an email and he'll respond to you directly himself. This would all change with the EU."

"If we joined the EU, we would get maybe five MEPs, similar to Malta, and three votes in the Council of Ministers. Our voice just would not be heard there. Our interests would instantly be sidelined by the bigger countries."

Although Mr. Guðmundsson, a founder of the now defunct hard-right anti-immigrant Flokkur Framfarasinna party, admits that if the EU were to make some sort of special concessions on the issue of representation and fisheries, this could swing the issue in favour of accession.

"If Brussels were to offer us some boosted voting weight, that could change things, but they cannot do this without upsetting Malta and reopening the question of how all member states vote. It's impossible."

"What would also be necessary would be to keep full authority over fishing, keep fish completely outside the common fisheries policy," he said, highlighting the second make-or-break issue for Iceland.

Fisheries opt-out

On the question of fish, Messrs Petursson and Gudmundsson are not so far apart.

"Fish is absolutely the big issue," said the Evropusamtokin chairman. "Fisheries still represent a full third of our foreign currency earnings, so it's also seen as symbolic of our sovereignty."

"If there were an 'opt-out' of fisheries policy, we would definitely vote in favour. At the same time, it's probably unrealistic to expect a complete opt-out. But there is no way that we could allow any foreign vessels into Icelandic waters. Anything less is out of the question."

According to the Icelandic ambassador, the government has yet to finalise its initial negotiating stance on the subject.

Mr. Petursson meanwhile believes the comments of the finance minister and the former foreign minister to be disconcerting portents.

"The finance minister has always been very honest and considered with his views. I have a lot of respect for him. The last few months have been very tough and he's really shown great statesmanship," he said. "Of course, he has to placate his voters - he's a Left Green, but it's not a good sign that he's saying this just as negotiations are about to start."

"It's also not good that Baldvin is saying this. He's a very strong pro-European."

If Iceland rejects the EU this time, Mr. Petursson believes that the small north Atlantic outpost will nevertheless become a member of the bloc at some point.

"Maybe not this round we will win - I hope we will, but if not in this round then in the near future, eventually Iceland will join. I like that phrase you have in English: It's a marathon, not a sprint."


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