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A Referendum by 2027 Becomes More Likely
In recent years, the debate on Iceland’s entry into the European Union (EU) has experienced a new liveliness. With the installation of the new Icelandic government, which took place last Saturday, this prospect could become a reality. The centre-left coalition that leads the country has promised to hold a referendum on EU membership by 2027, marking an important step in a discussion that recurs cyclically but has so far never found a definitive outcome.
A young and determined government
The new executive was born from the early elections of November 2023, made necessary by the internal disagreements that had led to the fall of the previous government. The coalition includes three parties: the Social Democrats, who obtained 20.8% of the votes, the Reformists (15.8%) and the People’s Party (13.8%). The government is headed by Kristrún Frostadóttir, leader of the Social Democrats, who at just 36 years old became the youngest person to hold the office of prime minister in Iceland’s history. Among the main promises of the new administration are not only the referendum, but also the establishment of a commission of independent experts to assess the advantages and disadvantages of using the Icelandic krona, as well as the implications of a possible adoption of the euro. This choice reflects a pragmatic and analysis-oriented approach, which aims to provide the population with an informed basis for making a crucial decision for the future of the country.
A historic but never resolved debate
The idea of Iceland as a member of the EU is not new. The country had already applied for membership in 2009, following the global financial crisis that had brought the Icelandic economy to its knees. The hope at the time was that entry into the Union and the adoption of the euro could stabilize the economic situation. Formal negotiations began in 2010 but were put on hold in 2013 when a conservative, Eurosceptic government, composed of the Progressive Party and the Independence Party, came to power. In 2015, Iceland officially withdrew its candidacy, ending a process that had aroused both enthusiasm and doubts. Despite this, the country has remained strongly integrated with Europe. It is part of the Schengen area, the European Free Trade Association (EFTA) and adheres to the Dublin agreements on receiving asylum requests. However, joining the EU would represent a significant change, with implications that go far beyond the agreements already in place.
What do Icelanders think?
The Icelandic public has never had a single position on EU membership. According to a poll conducted in June 2023, 54% of Icelanders would be in favour of joining the Union, a percentage up from the past, when support stood at around 25%. Although the consensus is still far from overwhelming, a large majority (74%) say they are in favour of addressing the issue through a referendum, regardless of the outcome of the vote. This reflects the collective desire to have a clear and democratic discussion on a crucial issue for the future of the country. Among the arguments in favour of joining the Union, the economy plays a central role. Iceland has faced years of economic instability, and inflation, although declining, remains a worrying issue. In February 2023, inflation had exceeded 10%, while today it is around 5%. Adopting the euro could reduce exchange rate volatility and stabilize the cost of living, a goal declared by the new government. EU membership could also offer advantages for trade, strengthening economic relations with other member countries and expanding opportunities for Icelandic exports. However, there are also serious concerns. One of the main obstacles concerns fishing, a crucial sector for the Icelandic economy. European policies on fishing quotas could conflict with the interests of the country, which has traditionally strongly defended its sovereignty in this area. In addition, the debate on immigration has become more relevant than in the past, thanks to the increase in the foreign population in Iceland. This growth has raised concerns, especially among parties with more nationalist positions, such as the People’s Party, which, despite this, is part of the governing coalition.
The referendum promised by 2027 represents a historic opportunity for Iceland to address a long-standing issue. While growing integration with Europe and economic pressures are pushing for possible EU membership, concerns over the country’s sovereignty and specificities continue to raise doubts. The work of the expert commission announced by the government will be crucial in providing Icelanders with the information they need to decide. In the meantime, the debate promises to be heated, reflecting the many nuances of an issue that is not only economic or political, but also cultural and identity-related.
Alessandro Fiorentino