Icelanders headed to the polls on Saturday for a knife-edge referendum on whether to resume European Union membership negotiations, a vote that has taken on added weight amid President Donald Trump’s aggressive Arctic posturing. The question before the Nordic nation of nearly 400,000 people is simple: “Should Iceland resume accession negotiations with the European Union?” Opinion polls suggest the advisory vote could go either way, with the country split almost exactly in half.
Should a majority say yes, accession talks would begin and, if successful, lead to a negotiated agreement put to a second referendum. The outcome, however, carries implications far beyond Iceland’s shores, as the Arctic becomes a hotspot for critical minerals and climate change melts sea ice, opening seasonal shipping routes. Trump, meanwhile, has renewed his push to acquire Greenland, Iceland’s closest neighbor, arguing it is vital for U.S. national security.
At the World Economic Forum in Davos, Switzerland earlier this year, Trump appeared to repeatedly confuse Greenland with Iceland. “All of the arguments put forth by the U.S. president for why it would be necessary for the U.S. to acquire Greenland actually equally applied to Iceland. The only difference is that Iceland is formally an independent country,” said Eiríkur Bergmann, professor of politics at Iceland’s Bifröst University.
Iceland has been here before. It applied to join the EU in 2009 in the aftermath of the global financial crisis but suspended membership talks in 2013 when a euroskeptic coalition government took power. Now, the debate has reopened at a time of deep geopolitical uncertainty. Foreign Minister Thorgerdur Gunnarsdottir said earlier this year that closer dialogue with the EU would be key to protecting the country’s interests. “It is clear that the international system we have lived in since the end of World War II is in turmoil,” she wrote in an article for Icelandic newspaper Visir, according to a Google translation.
Bergmann noted that diminishing trust in the U.S. as a security partner is another major concern. Iceland is a founding member of NATO but is the only ally without its own military forces. The country sits astride the so-called GIUK Gap, a naval choke point between Greenland, Iceland and the U.K. that links the Arctic to the Atlantic Ocean. “Iceland’s security and defense is guarded by our membership in NATO, but also, for many, more importantly, by a bilateral defense agreement with the U.S. since 1951. Now many people are sort of reconsidering the validity of that defense agreement,” Bergmann added.
Yet political experts stress that domestic issues—particularly the economy, sovereignty and fisheries—are what truly drive the debate. Jon Danielsson, director of the Systemic Risk Centre and reader in finance at the London School of Economics, said Iceland has fought tough battles with EU member states over its fishing industry, describing the issue as “totemic” given the sector’s economic importance. “For the Icelanders, the key issue in joining is the euro and to get away from the instability of its own currency and very high interest rates. So, the euro is really what they see as the target they want,” Danielsson told CNBC’s “Europe Early Edition” on Friday. He added, however, that even a yes vote would not guarantee the EU would offer the necessary conditions on fishing—a point he views as doubtful.
Former Icelandic Prime Minister Katrín Jakobsdóttir has said she does not see the argument for joining, noting that Iceland already maintains close economic collaboration with the 27-nation bloc and its citizens enjoy high living standards. “If a majority of the people wants to apply, it is very important to listen to that majority, but I haven’t changed my position,” she told CNBC in mid-April.
Iceland is already tightly woven into the European fabric. Through its membership in the European Economic Area, the volcanic island nation has access to the EU’s single market without full membership. It is also part of the Schengen Area, allowing passport-free travel with participating European countries. “The current Social Democrat-led government, which actually initiated or applied for membership the first time round, is now reheating its bid to close this unfinished business, so to speak,” said Steven Blockmans, deputy director at the International Centre for Defence and Security think tank.
For the EU, experts say the bloc is eager for a success story, particularly after Britain’s exit in 2020. A victory for the yes campaign could pave the way for a relatively quick negotiated agreement, Bergmann said, since Iceland’s coalition government faces its next general election no later than August 2028. “Bigger is better in this day and age, it seems,” Blockmans said, adding that welcoming a country with high GDP per capita and strong democratic performance would give “extra shine to the European integration project.”
