by Nicholas Whyte and Marius Vahl

(This was originally published by EurActiv on 20 March 2002. In February 2025 Marius Vahl and I requested that it be deleted from the Euractiv site.)

The next application for EU membership may come from a somewhat surprising direction. While the enlargement process understandably focuses on the south and east, things may be stirring on the North-western periphery of the EU. According to a recent opinion poll in Iceland, 91% of Icelanders want its government to initiate negotiations for accession to the EU, up from 68% a few weeks ago.

Things have been stirring for months. There has been a growing disenchantment with the political aspects of the EEA Agreement, which incorporates Iceland, Norway and Liechtenstein into the EU’s internal market without them being members of the EU. In practice this agreement obliges these three countries to adopt the acquis communautaire without however having any influence on its formulation. This ‘democratic deficit’ has prompted Foreign Minister Halldor Asgrimsson to call for an ‘update’ or ‘upgrade’ of the agreement to allow the three EEA states a greater say in the formulation of new rules and policies. This would surely be rejected by the EU, which has neither the time nor the inclination to jeopardise its decision-making autonomy in order to placate countries that are not interested in full EU membership.

Commentators speculate that Mr Asgrimsson’s initiative may be no more than positioning ahead of general elections next year. The current coalition government is dominated by Prime Minster David Oddson, the longest serving prime minister in Europe and an opponent of EU membership for Iceland. Mr Oddson’s centre-right Independence Party is however divided on the issue, and other important parties in Iceland, such as the Progressive Party led by Foreign Minister Asgrimmson appear to be increasingly in favour of negotiating EU accession. Members of the main opposition party, the Social Democrats, are expected to vote in support of a programme calling for EU membership at a party congress later this year. Elections are due before May 2003.

But even if Iceland applies for EU membership, the result is by no means a foregone conclusion. More than for most countries, the outcome of a referendum on membership would depend on the result of negotiations, in particular concerning the fisheries sector. The key concern in Iceland is that it would lose control over its fishery resources, politically the most vital sector of the Icelandic economy, if it has to adopt the Common Fisheries Policy (CFP) of the EU. The importance of the negotiation process per se is reflected in the aforementioned poll, where as many as one-third of those calling for membership negotiations are in fact against EU membership for Iceland!

The reform of the CFP due at the end of this year will therefore be pivotal. Hitherto, it has been assumed that Iceland would need an exemption from the CFP in order to vote for EU membership, and that no such exemption is on offer from Brussels. However, Icelanders are becoming increasingly aware of the problems caused by the partial exclusion of fisheries from the EEA agreement. In a speech last week in Berlin, Foreign Minister Asgrimsson claimed that Iceland’s fishery interests could be accommodated with a special Icelandic regime within the CFP, rather than through a permanent exemption from the CFP.

An Icelandic application would also give the EU the opportunity to retreat from one of the more embarrassing sections of the Nice Treaty with dignity. The division of seats in the European Parliament at Nice gave current member states Greece, Belgium and Portugal 22 MEPs each, while the Czech Republic and Hungary, with exactly the same population, were allocated only 20. But the Nice numbers were calculated on the basis of a ceiling of 732 members of European parliament and 27 member states. The four or five additional MEPs who would be allocated to Iceland are enough to take the European Parliament above the threshold set at Nice, which should lead to a recalculation and improved calibration overall.

An Icelandic application for EU membership could also initiate a knock-on effect leading to more applications. The debate on Iceland is watched with some trepidation by the Norwegian government, which consists of both opponents and supporters of EU membership who have agreed to dissolve the government if there is a new debate on EU membership. Looking further afield, Croatia, as the most advanced of the Western Balkan countries, is eagerly awaiting a favourable opportunity to lodge its accession request.

It is improbable that Iceland could apply to the EU in time to conclude negotiations at the same time as the ten states currently expected to join in 2004. More likely an Icelandic application will come after the elections due in May 2003; if the negotiations proceed at the same rapid pace as did the fourth enlargement, Iceland could well be ready for membership before Bulgaria or Romania, and certainly before Turkey.

Icelandic EU membership would also further exacerbate the asymmetries of the multilateral EEA, with potentially only Norway and tiny Liechtenstein left on the EFTA side. This would surely raise further questions about the viability of the complex institutional machinery of the EEA agreement, which is discussed in a recent CEPS report. Under the EEA agreement, Brussels has had a considerable effect on Icelandic life with few institutional consequences for the EU. That may be about to change.