Iceland

After spending three days in Reykjavik and the northern town of Akureyri, just below the Arctic Circle, I am starting to get the feeling that Iceland’s entry into the European Union is anything but guaranteed.  I have met government ministers and officials who are eager to steer their country into the EU.  But I have met a fairly wide range of private sector businessmen, teachers, students and other Icelanders who are either flatly opposed or at best non-committed.

The most passionate opposition I’ve encountered has come from representatives of the powerful fisheries industry and the less powerful but politically influential agricultural lobby.  Here’s what the manager of the national dairy farmers’ association said: “If we entered the EU, our tariffs would have to go.  Our home market share would drop by 25 to 50 per cent.  The number of farmers would drop by 60 to 70 per cent.  EU membership would deal us a tremendous blow, there’s no doubt about it.” Read more

Will Iceland really join the European Union?  I have come to Reykjavik in search of answers.  In one sense, it’s the right time to be here: the skies are white for almost 24 hours a day at this time of year, appearing to throw light on everything.  But in another sense this promises to be a frustrating trip - Iceland itself doesn’t seem to know if it wants to be in the EU or not.

The opinion polls are not good.  After a long period in which a solid majority of about 60 per cent of Icelanders supported EU membership, things have turned upside down in recent months.  Support for EU entry was estimated to be as low as 28 per cent in one recent survey, whilst opposition now runs at about 60 per cent.  If Iceland is serious about joining the EU, it will have to hold a referendum, so these numbers matter.  Right now, however, we are a long way from a referendum – at least two years, and perhaps longer.  Much can change.

Enthusiasm for the EU was high when Iceland’s banking system and currency collapsed in 2008, prompting the introduction of a drastic austerity programme conducted under the beady eye of the International Monetary Fund.  But Iceland’s dispute with the UK and the Netherlands over how to repay British and Dutch savers who lost their money in Icesave, the failed online Icelandic bank, has changed public opinion. Read more

Enlargement of the European Union is, almost imperceptibly, moving forward once more.  EU foreign ministers are expected next week to forward Albania’s membership application to the European Commission for an opinion.  This is a necessary technical step on the path to entry – small, but important.

The Commission is already preparing opinions on the applications of Iceland and Montenegro.  The opinions will take quite some time to deliver – longer for Albania and Montenegro than for Iceland – but the machinery is now in motion. Read more

Ireland’s referendum on the Lisbon treaty on Friday should in principle be about the treaty’s contents, not the state of the Irish economy.  But the economy’s collapse over the past 12 months compels both pro-Lisbon and anti-Lisbon forces to confront the question of whether membership of the European Union – and, specifically, of the eurozone – has helped (even saved) Ireland, made things worse, or not made much difference one way or the other.

An interesting angle from which to approach this question is to ask whether Ireland has fared better than another island off the north-west coast of Europe that was thrown into turmoil at almost exactly the same moment last year – namely, Iceland.  Iceland isn’t a EU member and doesn’t use the euro.  Has this accelerated Iceland’s recovery or held it back? Read more