Iceland, 29th Member State of the EU?

Spot the odd one out

Iceland is many things, but definitely not your typical candidate country to the EU. If you were to play a spot-the-odd-one-out game with enlargement countries, Iceland would immediately catch the eye. Situated at the rift between the European and the North American continent, Iceland would have the smallest population in the Union; it boasts the world's oldest standing Parliament and its fisheries production represents more than 30% of the EU total - to mention only four peculiarities of the country.

Fast track to membership?

Admitted as a candidate state only one year after it submitted its application, Iceland seems to be on a fast-track to membership.

To take one example, Iceland receives 12 million Euros through the EU's Instrument for Pre-Accession. In comparison, Serbia gets double that only for its Programme at the border with Romania.

This is not only because Iceland is a small country. In fact, it goes a long way to proving that the country has very few technical problems to solve before its accession to the EU.

The challenges ahead

Nevertheless, although Iceland's accession to the EU might lack the drama and the implications of other ongoing enlargement processes, it is not short of challenges: starting with negotiations on fisheries, continuing with the 'Icesave dispute' and ending with public support for accession.

The ongoing dispute over mackerel quotas between the EU, Norway, Iceland and the Faroe Islands shows us how important the fishing sector is for Iceland and how determined the Icelanders are to fight over what they perceive as being their rights and interests. Indeed, fisheries represent 40% of Iceland's foreign currency earnings and roughly half of Icelandic merchandise exports. Therefore, the Icelanders claim that their fisheries sector situation is particularly unique and the agreement which will be reached on this chapter will most probably make or break the country's accession to the EU.

The 'Icesave' dispute with the Netherlands and the UK also remains unresolved at this stage. This issue has appeared in the wake of the bankruptcy of the three main Icelandic banks in 2008 and has been accentuated after the Icelandic president has twice decided to put to referendum an agreement on the repayment terms of loans to compensate British and Dutch depositors with Icesave. Although at the beginning of December Iceland made the first partial payments to priority creditors, amounting to almost a third of the recognized priority claims, the EFTA Surveillance Authority has decided to refer Iceland to the EFTA Court and the case is ongoing. Hopefully, by paying all its debt, Iceland will defuse the tension around this issue before the verdict of the Court and allow negotiations to proceed smoothly.

In the EU, in the eurozone

What threatens to be a more acute discussion is the state of the euro. Indeed, Iceland submitted its application in a period when it was feeling economically fragile and sought shelter under the euro umbrella. It was only after the EU representatives made it clear that there can be no accession to the euro zone without accession to the Union per se, that the Icelanders decided to put in their application. But from the main argument, the euro is now turning into a weakness for the pro-EU camp in the country, who finds itself in the difficult situation of explaining how the EU will get out of the euro crisis.

Icelanders: for or against?

This comes against a background of public opinion that was always divided on EU accession. During the last seven years only one of seventeen opinion polls on accession to the EU gave as a result a majority in favour. And, despite common perception, this was not after the Icelandic financial crisis, but before it: in September 2007. Nonetheless, there has been a quite steady majority in favour of starting and then continuing negotiations and minds might very well change as the case of Croatia showed us. However, voter turnout in Icelandic elections is usually very high (around 90%), compared to Croatia (60%) and the opponents of accession seem to be better organized and represent specific interests.

An identity for the future

Iceland has got off to a very good start. To make sure that it will keep up the good pace, political will is the most essential ingredient. Both the politicians and the population need to engage in a public debate about the advantages and disadvantages of accession. Beyond policies and institutions, the debate will have to also have to address a question of identity. Does Iceland want to face the tempest of the globalized world by itself or as part of the big European family? Only Icelanders can answer this question.