Iceland Bids for the EU

Black flags put up by protestors surrounded the pillars of the Parliament building on July 16th, when after five days of grueling debates MPs voted 33 to 28 in support of an application for EU membership. This outcome also mirrors overall public opinion that according to opinion polls, is almost evenly split. According to a Capacent Gallup poll from the end of July, 41.7% of 717 respondents were for joining the EU while 58.3% were against it. Politically, however, support for the application is broad and "yes" votes came from members of all five political parties.

"This is an historic decision for Iceland" announced Prime Minister Jóhanna Sigurdardóttir proudly. "Today’s vote was likely one of my most enjoyable, due to the importance I attach to this issue for Iceland."

However no steps would be taken without the people’s consent, the prime minister confirmed. "We will disseminate information on the benefits and costs of EU membership to the general public to ensure an informed choice can be made in a national referendum on a prospective Treaty of Accession," she said.

The European Commission President José Manuel Barroso, welcomed the parliament’s decision and urged the government to take the next steps.

"Iceland is a European country with long and deep democratic roots, [and] very close relations with the EU after some 40 years of EFTA membership and 15 years in the European Economic Area. It is now up to the Icelandic government to follow up this decision by officially applying to the Presidency of the EU," he said.

The following week, July 23, Iceland’s Foreign Minister, Össur Skarphédinsson, presented Swedish Foreign Minister Carl Bildt, with an application for Iceland’s membership to the EU at a formal ceremony in Stockholm, seat of the EU during Sweden’s six-month term in the rotating presidency.

Acceptance of the application was not guaranteed, however. Both the Netherlands and United Kingdom had raised reservations. After the collapse of a subsidiary of the Landsbanki, the British and Dutch government had rushed to cover the losses of claimants in their own countries while demanding restitution from the Icelandic government. On July 26th, the EU foreign ministers directed the European Commission to start the process of assessing Iceland’s accession.

If this assessment is positive, formal accession talks could begin next year.

With this directive, Iceland has entered the race with Croatia and Macedonia to become the 28th EU member state. Iceland now has to make sure that the country won’t stumble over the inevitable hurdles, including widespread public disdain and disputes over fishing rights.

This may prove difficult.

With fishing being the country’s most important industry, opponents of the bid fear that an opening of their territorial waters to the EU could harm local fishermen. History has shown that Iceland is even prepared to lead a war to defend the fishing industry. In the 1970s during the so-called Cod-Wars the country even broke down its diplomatic relations with United Kingdom over a dispute over its fishing territory. On the other hand, given the devastating effects of the economic crisis and the collapse of top Icelandic banks, more and more Icelanders are now likely to support the bid. But with the failure of the conservative opposition call for a plebiscite, the process will still take years to reach ratification.

Since Iceland’s bankruptcy, many countries have expected its fast entry into the EU. Some suggest that it will be an easier process than for others, like Turkey and Albania, who have waited years for entry – due to Iceland’s longtime membership with the European Free Trade Association and its bilateral Free Trade Agreement with the EEC since 1972.

Commissioner for Enlargement Olli Rehn says otherwise:

"Iceland’s application will be treated by the book, there will be no short-cuts," said Rehn, charged with drawing up the detailed assessment of Iceland’s laws and institutions. However the common democratic and cultural heritage could make a difference.

"Iceland is already deeply integrated with the EU. The distance still to be covered will be shorter, although not necessarily easier," said Rehn. Discussions on fishing rights will prove especially difficult, as fishing accounts for 37% of Iceland’s exports and employs 8% of the workforce. Hurdles are also expected in discussions over farm subsidies and entrance into the European Monetary Union.

Foreign Minister Skarphedinsson expects accession negotiations to take three years, despite some earlier prognoses in EU circles that Iceland might join the EU already in 2011.

As the reforms in Macedonia are progressing very slowly and Slovenia continues to block Croatia’s accession plans for 2011 over border disputes, Iceland may yet become Europe’s 28th member state.