Brussels – Thirteen years after Iceland’s EU accession negotiations were frozen, the victory of the “no” front in the 29 August referendum on restarting accession talks has dealt another severe blow to the prospect of Reykjavík bringing to a conclusion a process that began in 2009. One thing is certain – both in the short and the long term, it will be difficult to convince Icelanders that EU membership would be beneficial to them.
As the National Electoral Commission reports, 52,8% of Icelandic voters decided to reject the government’s plan to restart negotiations with Brussels on the terms of Reykjavík’s potential EU membership. This was one of the main goals of the governing coalition led by Kristrún Frostadóttir (Social Democrat), set out in December 2024 when the new centre-left coalition took office.
It is worth recalling that this was not a referendum on EU membership – if the negotiations were successfully concluded, there would then be a second referendum on whether Iceland should, in fact, join the EU. For this reason, the Frostadóttir government is not legally obliged to throw in the towel. However, with a majority of Icelanders opposed to restarting a process that was suspended after the 2013 general election, the pro-EU forces in power find themselves in a position of weakness.
Three issues help understand the result of this referendum. Sovereignty, the economy and fisheries.
As Auðunn Arnórsson, journalist and lecturer at the University of Iceland, explained to The New Union Post, when it comes to sovereignty, opponents of EU membership believe that the country would be surrendering its independence. They overlook the fact that, for more than 30 years, Iceland has effectively been a subscriber to EU legislation through the EEA/EFTA framework, while Reykjavík has “almost no role at all” at the table where decisions are taken and that “automatically becomes part of Icelandic legislation.”
On the economic front, the main issue concerns the Icelandic króna. The pro-EU camp has not been able to make it sufficiently clear to wage earners and ordinary consumers in Iceland that retaining a small currency that fluctuates significantly “is not in their interest,” and that adopting the euro – with the greater stability and lower interest rates it could bring – only comes by joining the EU. On the contrary, as most public debt is indexed to inflation, only the wealthier segments of the population have an interest in retaining the Icelandic króna, as they can lend money with relatively little risk and receive the value of their loans back, plus interest.
Finally, the main reason why the majority of Icelanders have always been sceptical about joining the EU is related to the fear of losing control over the country’s fisheries resources. The EU Common Fisheries Policy has “a very bad reputation” not only in Iceland, but also in Norway, the Faroe Islands and Greenland, and this is “why the whole north-western flank of Europe is not part of the EU,” the Icelandic journalist and analyst explains.
Three aspects of a potential reopening of talks between Brussels and Reykjavík are particularly controversial in Iceland, as they would alter the current arrangements governing the country’s fisheries.
First, the formal decision on the total allowable catch would be taken each year at a meeting of the EU fisheries ministers in Brussels. Second, reciprocity would be granted for foreign investment in Icelandic fisheries companies, as it is currently forbidden by law for non-Icelanders to own more than 49% of companies that hold quotas in this national resource. Third, the mandate to negotiate with third countries – including Norway – on fisheries involving shared and migratory stocks would pass to the European Commission.
The state of EU–Iceland relations
Iceland submitted its application for EU membership in 2009. Candidate status was granted in June 2010, with accession negotiations beginning the following month.
However, following the 2013 general elections, Reykjavík froze the negotiations and, two years later, sent a letter requesting that the EU no longer consider Iceland an applicant country. In August 2026, a popular referendum rejected the reopening of the accession talks.
Despite this, it remains closely linked to the EU through its membership in the European Economic Area (EEA) Agreement, which unites all 27 EU Member States with the European Free Trade Association (EFTA) countries – Iceland, Liechtenstein, and Norway – in the Single Market.
Reykjavík is also a member of the Schengen Agreement, giving its citizens the right to travel without a passport within the area, and is a signatory to the Dublin Regulation on asylum policy. As a member of the Arctic Council, Reykjavík supports the EU’s bid for formal observer status.
Additionally, Iceland participates in a wide range of EU policies, agencies, and programmes, covering areas such as enterprise, environment, education and research, competition policy, state aid, social policy, consumer protection, tourism, and culture.
Trade relations between Reykjavík and Brussels are primarily governed by the 1972 free trade agreement and the EEA Agreement, which extends the Single Market to EFTA countries. As the EU’s Common Agricultural Policy and Common Fisheries Policy are not included under the EEA Agreement, Article 19 provides the legal basis for establishing rules to progressively liberalise agricultural trade on a mutually beneficial basis.
