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Iceland Iceland ( is, Ísland; ) is a Nordic island country in the North Atlantic Ocean and in the Arctic Ocean. Iceland is the most sparsely populated country in Europe. Iceland's capital and largest city is Reykjavík, which (along with its ...
is heavily integrated into the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
via the Agreement on the
European Economic Area The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade As ...
and the
Schengen Agreement The Schengen Agreement ( , ) is a treaty which led to the creation of Europe's Schengen Area, in which internal border checks have largely been abolished. It was signed on 14 June 1985, near the town of Schengen, Luxembourg, by five of the t ...
, despite its status as a non- EU member state. Iceland applied for membership in 2009 but the application was controversial and the
Minister of Foreign Affairs A foreign affairs minister or minister of foreign affairs (less commonly minister for foreign affairs) is generally a cabinet minister in charge of a state's foreign policy and relations. The formal title of the top official varies between co ...
sent a letter in 2015 ending the application process.


Comparison


Integration

Iceland is a member of the
European Free Trade Association The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four European states: Iceland, Liechtenstein, Norway and Switzerland. The organization operates in parallel with the European U ...
(EFTA), a grouping of four non-EU European countries, and is also part of the
European Economic Area The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade As ...
(EEA). Through the EEA, Iceland participates with a non-voting status in certain EU agencies and programmes, including enterprise, environment, education (including the Erasmus Programme) and research programs. Iceland also contributes funds to "social and economic cohesion" in the EU/EEA.Iceland
EEAS
Iceland also frequently consults the EU on foreign affairs and frequently aligns itself to EU foreign policy. Iceland also participates in EU civilian
peacekeeping Peacekeeping comprises activities intended to create conditions that favour lasting peace. Research generally finds that peacekeeping reduces civilian and battlefield deaths, as well as reduces the risk of renewed warfare. Within the United ...
missions.Iceland´s home is in Europe
Icelandic Ministry of Foreign Affairs
Iceland is a member of the Nordic Passport Union and the
Schengen Area The Schengen Area ( , ) is an area comprising 27 European countries that have officially abolished all passport and all other types of border control at their mutual borders. Being an element within the wider area of freedom, security and ...
, which now is under EU law, as a non-voting participant. Iceland's participation in the Schengen Area allows free movement of people between Iceland and the rest of the Schengen Area. Several thousand Icelanders travel to and study or work in the EU. A large majority of foreigners in Iceland come from the EU. Iceland is also associated with the Dublin Convention on justice and home affairs cooperation. Iceland also has links to several EU member states through its membership of the
Nordic Council The Nordic Council is the official body for formal inter-parliamentary Nordic cooperation among the Nordic countries. Formed in 1952, it has 87 representatives from Denmark, Finland, Iceland, Norway, and Sweden as well as from the autonomou ...
.


Use of the euro

During the
2008–2011 Icelandic financial crisis The Icelandic financial crisis was a major economic and political event in Iceland that involved the default of all three of the country's major privately owned commercial banks in late 2008, following their difficulties in refinancing their ...
, instability in the
Icelandic króna The króna or krona (sometimes called Icelandic crown; sign: kr; code: ISK) is the currency of Iceland. Iceland is the second-smallest country by population, after the Seychelles, to have its own currency and monetary policy. Name Like the ...
led to discussion in
Iceland Iceland ( is, Ísland; ) is a Nordic island country in the North Atlantic Ocean and in the Arctic Ocean. Iceland is the most sparsely populated country in Europe. Iceland's capital and largest city is Reykjavík, which (along with its ...
about adopting the euro. However,
Jürgen Stark Jürgen Stark (born 31 May 1948 in Gau-Odernheim, Germany) is a German economist who served as a member of the Executive Board of the European Central Bank from 2006 to 2011 and concurrently as ECB chief economist. Within the Executive Board, he ...
, a Member of the Executive Board of the
European Central Bank The European Central Bank (ECB) is the prime component of the monetary Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's most important centra ...
, has stated that "Iceland would not be able to adopt the EU currency without first becoming a member of the EU". As of the ECB's May 2012 convergence report, Iceland did not meet any of the convergence criteria. One year later, the country managed to comply with the deficit criteria and had begun to decrease its
debt-to-GDP ratio In economics, the debt-to-GDP ratio is the ratio between a country's government debt (measured in units of currency) and its gross domestic product (GDP) (measured in units of currency per year). While it is a "ratio", it is technically measured ...
, but still suffered from elevated HICP inflation and long-term governmental interest rates.


Explanations for Iceland's non-membership of the European Union

Academics have proposed several explanations for why Iceland has not joined the European Union: * The importance of the fishing industry to Iceland's economy and the perception that EU membership (and its
Common Fisheries Policy The Common Fisheries Policy (CFP) is the fishery, fisheries policy of the European Union (EU). It sets quotas for which Member state of the European Union, member states are allowed to catch each type of fish, as well as encouraging the fishin ...
) will have an adverse effect on the fishing industry. * The perception that EU membership will have an adverse effect on Iceland's agricultural sector. * Iceland's strong ties with the United States, which included significant economic, diplomatic and military assistance, decreased Iceland's dependence on European countries. * The victories in the
Cod Wars The Cod Wars ( is, Þorskastríðin; also known as , ; german: Kabeljaukriege) were a series of 20th-century confrontations between the United Kingdom (with aid from West Germany) and Iceland about fishing rights in the North Atlantic. Each of ...
may have strengthened Icelandic nationalism and boosted the perception that Iceland can succeed through unilateral or bilateral means rather than compromise in multilateral frameworks. * The Icelandic electoral system favors rural areas, which are more eurosceptic. * The tendency for Icelandic elites to pursue education in the United States or eurosceptic European countries (such as the United Kingdom or the Nordic countries), and to cooperate more closely with political elites from those countries. * Icelandic nationalism and the legacy of Iceland's past as a colonial entity. * The impact of the
Icesave dispute The Icesave dispute was a diplomatic dispute between Iceland, and the Netherlands and the United Kingdom that began after the privately owned Icelandic bank Landsbanki was placed in receivership on 7 October 2008. As ''Landsbanki'' was one o ...
with the Netherlands and the UK.


Trade relations

Economic relations between Iceland and the European Union are primarily governed by two agreements: a bilateral
free trade agreement A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occ ...
signed in 1972, and the agreement on the EEA in 1994. The EEA was established to give Iceland, among other European countries outside the EU, access to the EU market. Iceland's access to the EU market in respect of agriculture and fisheries is dealt with by separate bilateral agreements. Iceland is legally bound to implement into its own law all
EU directives A directive is a legal act of the European Union that requires member states to achieve a particular result without dictating the means of achieving that result. Directives first have to be enacted into national law by member states before thei ...
applicable to the free movement of goods, persons, services and capital. This is complemented by regular meetings between EU and Icelandic officials, including a twice-yearly meeting of EEA foreign ministers.Iceland
European Commission
78% of Iceland's exports went to the EU and 52% of Iceland's imports came from it, making the EU Iceland's most important trading partner, followed by Norway. Traditionally, Iceland's economy has focused on
fisheries Fishery can mean either the enterprise of raising or harvesting fish and other aquatic life; or more commonly, the site where such enterprise takes place ( a.k.a. fishing ground). Commercial fisheries include wild fisheries and fish farms, ...
and
renewable energy Renewable energy is energy that is collected from renewable resources that are naturally replenished on a human timescale. It includes sources such as sunlight, wind, the movement of water, and geothermal heat. Although most renewable energy ...
, but it has been diversifying into
aluminium Aluminium (aluminum in American and Canadian English) is a chemical element with the symbol Al and atomic number 13. Aluminium has a density lower than those of other common metals, at approximately one third that of steel. It ha ...
production,
pharmaceuticals A medication (also called medicament, medicine, pharmaceutical drug, medicinal drug or simply drug) is a drug used to diagnose, cure, treat, or prevent disease. Drug therapy ( pharmacotherapy) is an important part of the medical field and re ...
,
information technologies Information technology (IT) is the use of computers to create, process, store, retrieve, and exchange all kinds of data . and information. IT forms part of information and communications technology (ICT). An information technology system (I ...
,
tourism Tourism is travel for pleasure or business; also the theory and practice of touring (disambiguation), touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tour (disambiguation), tours. Th ...
and the
financial sector Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...
. Iceland is still a large exporter of fish (the third largest exporter to the EU after Norway and China) with a world trade surplus of €1.1 billion in 2008. In fisheries, the EU had a 2009 trade deficit of €879 million. Until Iceland's 2009 financial crisis, its commercial services sector had been growing rapidly, accounting for almost 35% of total exports (goods and services combined).


EU membership

Iceland applied to join the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
on 16 July 2009 and formal negotiations began on 27 July 2010.Timeline of events – Iceland's application for membership of the EU
Icelandic Ministry for Foreign Affairs
However, on 13 September 2013 the
Government of Iceland The politics of Iceland take place in the framework of a parliamentary representative democratic republic, whereby the president is the head of state, while the prime minister of Iceland serves as the head of government in a multi-party sy ...
dissolved its accession team and suspended its application to join the EU. On 12 March 2015, Foreign Minister of Iceland
Gunnar Bragi Sveinsson Gunnar Bragi Sveinsson (born 9 June 1968) is an Icelandic politician for the Center Party. He is a member of the Althingi (Iceland's parliament) for the Centre Party for the Northwest of Iceland constituency since 2017. He was the Chairman o ...
stated that he had sent a letter to the EU withdrawing the application for membership, without the approval of the
Althing The Alþingi (''general meeting'' in Icelandic, , anglicised as ' or ') is the supreme national parliament of Iceland. It is one of the oldest surviving parliaments in the world. The Althing was founded in 930 at (" thing fields" or "assemb ...
, though the European Union stated that Iceland had not formally withdrawn the application.
RÚV Ríkisútvarpið (RÚV) (pronounced or ) ( en, 'The Icelandic National Broadcasting Service') is Iceland's national public-service broadcasting organization. Operating from studios in the country's capital, Reykjavík, as well as regional ce ...

Application not formally withdrawn
/ref> If negotiations were to resume, Iceland would face controversial issues on fisheries which could potentially derail an agreement, despite already being a member of the
European Economic Area The European Economic Area (EEA) was established via the ''Agreement on the European Economic Area'', an international agreement which enables the extension of the European Union's single market to member states of the European Free Trade As ...
(which excludes fishery). If an agreement were to be concluded, the accession treaty would be subject to a national referendum in Iceland and require ratification by every EU state.National Referendum – Iceland's application for membership of the EU
Icelandic Ministry for Foreign Affairs


Pre-2008 opinion

From
1995 File:1995 Events Collage V2.png, From left, clockwise: O.J. Simpson is acquitted of the murders of Nicole Brown Simpson and Ronald Goldman from the year prior in "The Trial of the Century" in the United States; The Great Hanshin earthquake str ...
to
2007 File:2007 Events Collage.png, From top left, clockwise: Steve Jobs unveils Apple Inc., Apple's first iPhone (1st generation), iPhone; TAM Airlines Flight 3054 overruns a runway and crashes into a gas station, killing almost 200 people; Former Pakis ...
the government coalition of the
conservative Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization in ...
Independence Party (''Sjálfstæðisflokkurinn'') and the liberal
Progressive Party Progressive Party may refer to: Active parties * Progressive Party, Brazil * Progressive Party (Chile) * Progressive Party of Working People, Cyprus * Dominica Progressive Party * Progressive Party (Iceland) * Progressive Party (Sardinia), Ita ...
(''Framsóknarflokkurinn''), opposed joining the EU, while the opposition Social Democratic Alliance (''Samfylkingin'') supported membership negotiations. In 1994, the Social Democratic Party (''Alþýðuflokkurinn'') became the first Icelandic political party to include the intention to apply to join the EU in its policy statement. Despite this hostility towards EU membership, the Independence Party was forced to accept some of the constraints associated with participation in the European project. Iceland sought shelter provided by the EEA, EFTA and Schengen because non-membership of the EEA and EFTA would have threatened its key economic interests, and non-membership of Schengen would have imposed burdens on Icelandic individuals. Former
Prime Minister A prime minister, premier or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. Under those systems, a prime minister is ...
Halldór Ásgrímsson Halldór Ásgrímsson (pronounced ; 8 September 1947 – 18 May 2015) was an Icelandic politician, who served as prime minister of Iceland from 2004 to 2006 and was leader of the Progressive Party from 1994 to 2006. Education and early life Ha ...
predicted on 8 February 2006 that the country would join the EU by 2015. He added that the decisive factor would be the future and the size of the
Eurozone The euro area, commonly called eurozone (EZ), is a currency union of 19 member states of the European Union (EU) that have adopted the euro (€) as their primary currency and sole legal tender, and have thus fully implemented EMU pol ...
, especially whether Denmark, Sweden and the UK would have adopted the
euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
or not. His prediction received some criticism, not the least from people within his own government. Another former Prime Minister,
Geir H. Haarde Geir Hilmar Haarde (; born 8 April 1951) is an Icelandic politician, who served as prime minister of Iceland from 15 June 2006 to 1 February 2009 and as president of the Nordic Council in 1995. Geir was chairman of the Icelandic Independence Pa ...
, has on a number of occasions stated his opposition to EU membership, both as Foreign Minister under Halldór Ásgrímsson and after taking office as Prime Minister. In response to Halldór Ásgrímsson's earlier prediction, Haarde said, "I don't share that point of view. Our policy is not to join in the foreseeable future. We are not even exploring membership." In a speech at a conference at the
University of Iceland The University of Iceland ( is, Háskóli Íslands ) is a public research university in Reykjavík, Iceland and the country's oldest and largest institution of higher education. Founded in 1911, it has grown steadily from a small civil servant ...
on 31 March 2006, Geir Haarde repeated what he had said on a number of occasions—that no special Icelandic interests demanded membership of the EU. In the same speech he further explained in detail why it would not be in the interest of Iceland to adopt the euro. Following the 2007 election, the Independence Party and the Social Democratic Alliance formed a new coalition with a policy of not applying for membership, but setting up a special committee to monitor the development within the EU and suggest ways to respond to that. Due to Iceland's limited currency, the government has explored the possibility of adopting the euro without joining the European Union. The EU, however, says that Iceland cannot join the
Economic and Monetary Union An economic and monetary union (EMU) is a type of trade bloc that features a combination of a common market, customs union, and monetary union. Established via a trade pact, an EMU constitutes the sixth of seven stages in the process of economic ...
(EMU) without becoming a full EU member state (all other non-EU states that use the euro do so because they previously used a member state currency that was replaced by the euro).


Effect of 2008 financial crisis

At a meeting of members of his party on 17 May 2008, Geir Haarde said that in his opinion the cost of joining the EU outweighed the benefits, and therefore he was not in favour of membership. However, in October 2008, during talks to repatriate a portion of Iceland's foreign invested pension funds—Iceland having been particularly hard hit by the financial crisis of September 2008—the unions demanded that Iceland apply for EU membership in return for wage restraint. On 30 October 2008,
Þorgerður Katrín Gunnarsdóttir Þorgerður Katrín Gunnarsdóttir (born 4 October 1965) is an Icelandic politician, who has been chairman of the Reform Party since 2017. Þorgerður was deputy chairwoman of the Independence Party from 2005 to 2010. She was the Minister o ...
, minister of education, said that "Iceland has to define its long-term national interests and part of that is a revision of the currency regime, including a possible EU application" and that an application for membership needed to be discussed "in weeks rather than months". Two weeks later, on 17 November 2008, the Independence Party announced it would hold its party congress in January 2009 instead of Autumn 2009, to reconsider the possibility of applying for EU membership; the Progressive Party also announced it would hold its party congress in January, after two anti-EU MPs (including the party leader) resigned and were replaced by MPs more positive towards EU application. The Progressive Party accepted at its congress to support application for EU membership but with very strict conditions including one demanding full authority for Iceland over its fishing grounds and other national resources. When the government headed by the Independence Party was dissolved in January the party decided to postpone its congress until March. The congress eventually decided on an unchanged opposition to EU membership but also claimed that if the issue were opened by others both an application and an initial accession treaty with the EU should be put to a referendum. The US denied Iceland's financial request for financial support after the 2008 economic crash. Iceland turned to the EU for assistance, but they also turned Iceland's request for aid down. This seriously damaged the efforts of the Europhiles in Iceland to sell the EU as a shelter provider to Iceland. The Europhiles mainly focused on the potential economic benefits of EU membership and the adoption of the euro, emphasizing the benefits of cheaper goods for consumers and enterprises, and access to aid from the EU structural funds for rural areas, agriculture and the tourism industry. There was, however, no mention of the EU as a soft security shelter provider. After a speedy economic recovery and considerable domestic opposition to membership, the application was put on hold in 2013. At present, the Icelandic government does not regard the country as a candidate to join the EU, though it has not withdrawn its membership application. Iceland's membership of the European Economic Area (EEA) and Schengen provide Iceland with partial political, economic and societal shelter but it is secondary to formal membership of the EU. Iceland's membership of the EU is unlikely to materialize in the present domestic and European environment. A dramatic change is needed to alter Iceland's present European policy. Domestic features of each and every state need to be taken into consideration in order to fully understand its calculations of cost and benefits of a potential shelter relationship.


2009 election and parliamentary debate

Iceland's finance minister, Steingrímur J. Sigfússon, ahead of the country's first elections since the
financial crisis A financial crisis is any of a broad variety of situations in which some financial assets suddenly lose a large part of their nominal value. In the 19th and early 20th centuries, many financial crises were associated with banking panics, and man ...
, stated that "any decision for Iceland to join the
European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...
and the single currency must be taken by its people, not one political party", on the subject that the issue of EU membership was the greatest threat to a stable coalition. The 2009 election, which followed the financial crisis, saw the Progressive Party switch to supporting EU membership but the Independence Party called for a referendum prior to the start of negotiations. The Social Democratic Alliance made joining the EU a key issue in their campaign.Icelandic parties clarify EU positions ahead of snap polls
''EUBusiness'', 31 March 2009
After the win of the pro-EU Social Democratic Alliance in the election, Prime Minister
Jóhanna Sigurðardóttir Jóhanna Sigurðardóttir (; born 4 October 1942) is an Icelandic politician, who served as prime minister of Iceland from 2009 to 2013. She became active in the trade union movement, serving as an officer. Elected as an MP from 1978 to 2013, ...
spoke of an immediate application to the European Union and adoption of the euro within four years as a way to deal with the country's debt. In late April 2009, it was announced that the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...
, which at the time was a member state of the European Union with whom Iceland has had a long history of fishing and territorial water disputes, supported Iceland joining the EU. In early May 2009, it was leaked that the issue of application for EU membership would likely be left to the parliament, in which the Alliance, the Progressive Party and the Citizens' Movement together already had enough seats to approve the application. Sigmundur Davíð Gunnlaugsson, the leader of the Progressive Party, strongly objected to the suggestion that his party would assist the government in this matter, however. The anti-EU Left-Green coalition partner accepted that in spring 2010, the minister for foreign affairs would present to the parliament a bill on talks with the EU. On 10 May 2009, Prime Minister Jóhanna Sigurðardóttir announced that the government intended to move towards membership more quickly than previously expected. She announced that a bill would be introduced in parliament on 15 May 2009, authorising the opening of accession talks with the EU. She also stated that she was confident that the legislation would pass, and that she had secured a parliamentary majority on the issue, despite the official opposition to talks by one of her coalition partners. She went on to say that she expected an official application to be submitted no later than July 2009. This seemed to leave Iceland on course to join the EU along with Croatia in 2011, as predicted by EU Enlargement Commissioner,
Olli Rehn Olli Ilmari Rehn (; born 31 March 1962) is a Finnish economist and public official who has been serving as governor of the Bank of Finland since 2018. A member of the Centre Party, he previously served as the European Commissioner for Enlargeme ...
. The government has stated that the issue will be put to a vote once an accession agreement has been negotiated. The motion to file an application for membership was officially introduced in parliament on 25 May 2009. Voting was to have been held on 13 July, but was postponed until 16 July. First, a proposal by the Independence Party to hold a referendum on the membership application was defeated by 32 to 30 with one abstention. Then the Social Democratic Alliance's proposal to apply for membership immediately was approved with a narrow majority of 33 to 28 votes with 2 abstentions.


Application for membership

To become a member, a country must first apply and then be recognised as a candidate country. For that to happen the country must satisfy the first of the
Copenhagen criteria The Copenhagen criteria are the rules that define whether a country is eligible to join the European Union. The criteria require that a state has the institutions to preserve democratic governance and human rights, has a functioning marke ...
: it must be a politically stable democracy that respects human rights. Then negotiations will take place which will consider the country's fulfilment of economic criteria, the country's degree of adoption of EU legislation, and whether there shall be any exceptions. EU Enlargement Commissioner
Olli Rehn Olli Ilmari Rehn (; born 31 March 1962) is a Finnish economist and public official who has been serving as governor of the Bank of Finland since 2018. A member of the Centre Party, he previously served as the European Commissioner for Enlargeme ...
has claimed that negotiations on an accession treaty would take less than a year, because Iceland has already adopted two-thirds of EU legislation in relation to the EEA. He has on other occasions claimed that the negotiations could take up to four years. On 30 January 2009, Rehn commented that Iceland could enter the European Union promptly in 2011, at the same time as
Croatia , image_flag = Flag of Croatia.svg , image_coat = Coat of arms of Croatia.svg , anthem = " Lijepa naša domovino"("Our Beautiful Homeland") , image_map = , map_caption = , capi ...
, saying that Iceland is an old democracy but also that it should not get special treatment. Fishing quotas and Icelandic whaling may be the toughest issues in any such negotiations. On 16 July 2009, the Althing voted in favour of accession talks with the EU (with 33 votes in favour, 28 against, and 2 abstentions). The head of the parliamentary committee on EU affairs, Árni Þór Sigurðsson, has stated that Iceland will not be ready to join the EU any earlier than 2013. However the government stated that it planned to complete negotiations by the end of 2010. On 17 July 2009, the application for Icelandic membership of the EU was handed to the government of
Sweden Sweden, formally the Kingdom of Sweden,The United Nations Group of Experts on Geographical Names states that the country's formal name is the Kingdom of SwedenUNGEGN World Geographical Names, Sweden./ref> is a Nordic countries, Nordic c ...
, which then held the presidency of the
Council of the European Union The Council of the European Union, often referred to in the treaties and other official documents simply as the Council, and informally known as the Council of Ministers, is the third of the seven Institutions of the European Union (EU) as ...
, by the ambassador of Iceland in
Stockholm Stockholm () is the capital and largest city of Sweden as well as the largest urban area in Scandinavia. Approximately 980,000 people live in the municipality, with 1.6 million in the urban area, and 2.4 million in the metropo ...
. The application was again handed over by the Icelandic foreign minister to the Swedish one in a ceremony in Stockholm on 23 July 2009. The letter of application was dated 16 July 2009. The application was acknowledged by the Council of the European Union on 27 July 2009.


Accession negotiations

Sweden Sweden, formally the Kingdom of Sweden,The United Nations Group of Experts on Geographical Names states that the country's formal name is the Kingdom of SwedenUNGEGN World Geographical Names, Sweden./ref> is a Nordic countries, Nordic c ...
, then holder of the
EU presidency The official title President of the European Union (or President of Europe) does not exist, but there are a number of presidents of European Union institutions, including: * the President of the European Council (since 1 December 2019, Charles ...
, announced that it would prioritise Iceland's EU accession process. On 24 July, the Lithuanian Parliament unanimously approved and gave full support for Iceland's membership application to join the European Union. Later, on 27 July,
Malta Malta ( , , ), officially the Republic of Malta ( mt, Repubblika ta' Malta ), is an island country in the Mediterranean Sea. It consists of an archipelago, between Italy and Libya, and is often considered a part of Southern Europe. It lies ...
also announced that it supports Iceland's EU bid. In September 2009, the
Spanish Spanish might refer to: * Items from or related to Spain: **Spaniards are a nation and ethnic group indigenous to Spain **Spanish language, spoken in Spain and many Latin American countries **Spanish cuisine Other places * Spanish, Ontario, Can ...
foreign minister visited Iceland to discuss the progress of the Icelandic application; Spain chaired the EU from January–June 2010. On 8 September, the EU commission sent a list of 2,500 questions to Iceland about its fulfilment of political and economic criteria and adoption of EU law. Iceland returned answers to them on 22 October 2009. On 2 November, Iceland selected a chief negotiator for the membership negotiations with the EU: Stefán Haukur Jóhannesson, Iceland's Ambassador to
Belgium Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to ...
. In January 2010 the
Icesave dispute The Icesave dispute was a diplomatic dispute between Iceland, and the Netherlands and the United Kingdom that began after the privately owned Icelandic bank Landsbanki was placed in receivership on 7 October 2008. As ''Landsbanki'' was one o ...
became an issue. The
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and ...
and the
Netherlands ) , anthem = ( en, "William of Nassau") , image_map = , map_caption = , subdivision_type = Sovereign state , subdivision_name = Kingdom of the Netherlands , established_title = Before independence , established_date = Spanish Netherl ...
want the Icelandic government to repay them the costs incurred in covering their citizens' losses due to the bankruptcy of some Icelandic banks. If Iceland does not pay, obstacles to membership could be laid by the United Kingdom and the Netherlands. If Iceland agrees to repay the UK and the Netherlands, the added debt will make it difficult to adopt the euro, a major reason for Iceland to join the EU, because of the
convergence criteria The euro convergence criteria (also known as the Maastricht criteria) are the criteria which European Union member states are required to meet to enter the third stage of the Economic and Monetary Union (EMU) and adopt the euro as their curre ...
. Spanish Foreign Minister Miguel Ángel Moratinos, who then held the Presidency of the European Union, has said that the Icesave dispute does not impact Iceland's application.
David Miliband David Wright Miliband (born 15 July 1965) is the president and chief executive officer (CEO) of the International Rescue Committee and a former British Labour Party politician. He was the Foreign Secretary from 2007 to 2010 and the Member of ...
, then British Foreign Minister, reaffirmed the UK's continued support for Iceland's EU application. Additionally, the Dutch Foreign Minister Maxime Verhagen has stated that while the opening of negotiations will not be blocked by the Icesave dispute, it must be resolved before Iceland's accession. In February 2010, the European Commissioner for Enlargement and European Neighbourhood Policy recommended to the Council of the European Union to start accession negotiations with Iceland. While it was expected that Iceland would be considered for official candidate status at the EU summit in March, this was delayed to allow the German national parliament, which has the authority to debate important EU policy such as enlargement before action is taken by the government, to consider the matter. The German Parliament voted in favour of opening membership negotiations on 22 April 2010. The
European Council The European Council (informally EUCO) is a collegiate body that defines the overall political direction and priorities of the European Union. It is composed of the heads of state or government of the EU member states, the President of the ...
decided in June to begin negotiations, and on 17 June 2010, the EU granted official candidate status to Iceland by formally approving the opening of membership talks.U summit approves membership talks for Iceland
World News; 17 June 2010.
Negotiations for membership of the EU started on 27 July 2010, with screening of specific acquis chapters beginning on 15 November 2010. Iceland became eligible for pre-accession funding from the EU through the
Instrument for Pre-Accession Assistance The Instrument for Pre-Accession Assistance, or simply IPA, is a funding mechanism of the European Union. As of 2007, it replaced previous programmes such as the PHARE, ISPA, SAPARD SAPARD (Special Accession Programme for Agriculture and Rural ...
(IPA) since July 2010. The first annual report on negotiations was published in November 2010: the main issues at stake remained the
fisheries Fishery can mean either the enterprise of raising or harvesting fish and other aquatic life; or more commonly, the site where such enterprise takes place ( a.k.a. fishing ground). Commercial fisheries include wild fisheries and fish farms, ...
sector and
whale hunting Whaling is the process of hunting of whales for their usable products such as meat and blubber, which can be turned into a type of oil that became increasingly important in the Industrial Revolution. It was practiced as an organized industry a ...
, while progress has been made concerning the
Icesave dispute The Icesave dispute was a diplomatic dispute between Iceland, and the Netherlands and the United Kingdom that began after the privately owned Icelandic bank Landsbanki was placed in receivership on 7 October 2008. As ''Landsbanki'' was one o ...
. The screening process ended and formal negotiations began on 27 June 2011. Four chapters were opened: science and research; education and culture; public procurement; information society and media. The first two were immediately closed, a first in accession history. Iceland aimed to open half of the remaining chapters under the Polish presidency (the second half of 2011) and the other half under the following Danish presidency (first half of 2012). Despite disputes over Icesave and fishing, and the fact there was then no majority in favour of membership in Iceland, Icelandic Foreign Minister Össur Skarphéðinsson was confident Iceland would join and looked to the EU's flexibility in negotiations with Norway during the 1990s as hope. He did however claim that ultimately it was the major fishing countries of the EU who would influence the outcome of the application. In February 2013, the Icelandic chief negotiator stated that the main driving force for Iceland joining the EU was the benefit to the country of adopting the euro to replace the inflation-plagued
Icelandic króna The króna or krona (sometimes called Icelandic crown; sign: kr; code: ISK) is the currency of Iceland. Iceland is the second-smallest country by population, after the Seychelles, to have its own currency and monetary policy. Name Like the ...
. Iceland's HICP inflation and related long-term government interest rates were both recorded to be around 6 per cent on average for 2012. Most importantly, however, while the country retained the Icelandic kronur, it was unable to lift the
capital controls Capital controls are residency-based measures such as transaction taxes, other limits, or outright prohibitions that a nation's government can use to regulate flows from capital markets into and out of the country's capital account. These measures ...
recently introduced in the turmoil of the economic crisis. Introduction of the euro, a far stronger currency, would allow the country to lift these capital controls and achieve an increased inward flow of foreign economic capital, which ultimately would ensure higher and more stable economic growth. To be eligible to adopt the euro, Iceland would need to join the EU, as unilateral euro adoption had previously been refused by the EU.



2013 election and withdrawal of application

The Icelandic Parliamentary committee on foreign affairs tabled a proposal on 18 December 2012 to suspend accession negotiations. The motion also called for an "application referendum" to be held to determine the will of the Icelandic people prior to any resumption of negotiations. A similar proposal was submitted to the Icelandic parliament in May 2012, but was rejected by a vote of 25 for and 34 against. The
Icelandic parliament The Alþingi (''general meeting'' in Icelandic, , anglicised as ' or ') is the supreme national parliament of Iceland. It is one of the oldest surviving parliaments in the world. The Althing was founded in 930 at ("thing fields" or "assembly ...
had yet to vote on the new proposal, which were supported primarily at the time by the opposition Independence Party and
Progressive Party Progressive Party may refer to: Active parties * Progressive Party, Brazil * Progressive Party (Chile) * Progressive Party of Working People, Cyprus * Dominica Progressive Party * Progressive Party (Iceland) * Progressive Party (Sardinia), Ita ...
. The leaders of both governing parties, the Social Democratic Alliance and
Left-Green Movement The Left-Green Movement ( is, Vinstrihreyfingin – grænt framboð), officially the Left Movement – Green Candidature and also known by its short-form name ''Vinstri græn'' (VG), is an eco-socialist political party in Iceland. The Left-Gree ...
, stated that they did not support the motion. However, some MPs from the Left-Green Movement declared their support for the measure. On 10 January 2013, the proposal was formally adopted by the Foreign Affairs committee. On 14 January, the Icelandic government announced that negotiations would be slowed, and that an accession agreement would not be reached before the parliamentary election in April. No new chapters would be opened prior to the election, though negotiations would continue on chapters that had already been opened. In February 2013, the national congress of both the Independence Party and Progressive Party reconfirmed their policy that further membership negotiations with the EU should be stopped and not resumed unless they are first approved by a national referendum, while the national congresses of the Social Democratic Alliance, Bright Future and Left-Green Movement reiterated their support for the completion of EU accession negotiations. On 19 March 2013,
Þorgerður Katrín Gunnarsdóttir Þorgerður Katrín Gunnarsdóttir (born 4 October 1965) is an Icelandic politician, who has been chairman of the Reform Party since 2017. Þorgerður was deputy chairwoman of the Independence Party from 2005 to 2010. She was the Minister o ...
, an Independence Party MP, put forward a motion in the
Althing The Alþingi (''general meeting'' in Icelandic, , anglicised as ' or ') is the supreme national parliament of Iceland. It is one of the oldest surviving parliaments in the world. The Althing was founded in 930 at (" thing fields" or "assemb ...
calling for a referendum asking the Icelandic public whether EU accession negotiations should continue. She proposed that the referendum be held during the upcoming parliamentary election in April if possible, or else during local elections in the spring of 2014. In response to Gunnarsdóttir and other proponents of EU integration within the Independence Party, Bjarni Benediktsson, the leader of the party, reiterated the party's policy of stopping negotiations with the EU, but promised to hold a referendum on continuing the negotiations in the first half of their term if they form government. The ruling left-wing parties suffered a major defeat in the parliamentary elections that were held on 27 April 2013, while the centrist Progressive Party had a large victory. The leaders of the Progressive Party and the Independence Party began negotiating the formation of a coalition government, and on 22 May it was announced that a coalition platform had been agreed to that would suspend all accession talks with the EU and not resume them unless approved by a
referendum A referendum (plural: referendums or less commonly referenda) is a Direct democracy, direct vote by the Constituency, electorate on a proposal, law, or political issue. This is in contrast to an issue being voted on by a Representative democr ...
. However, under Icelandic law, it is not the Government but the Icelandic Parliament which decides to end negotiations. On 13 June, Iceland's Foreign Minister
Gunnar Bragi Sveinsson Gunnar Bragi Sveinsson (born 9 June 1968) is an Icelandic politician for the Center Party. He is a member of the Althingi (Iceland's parliament) for the Centre Party for the Northwest of Iceland constituency since 2017. He was the Chairman o ...
informed the European Commission that the newly elected government intended to "put negotiations on hold". European Commission President Manuel Barroso responded on 16 July 2013 by requesting that the new Icelandic Prime Minister make a decision on the continuation of their accession bid "without further delay", and stressed that the EU remained "committed to continue the accession negotiations process, which I'm certain could address Iceland's specificities". In August 2013 the Icelandic government revealed that it had received a legal opinion that the 2009 Parliamentary vote did not oblige it to continue accession negotiations with the EU. In light of this, the Foreign Ministry stated that it had "decided to consider dissolving the negotiation committee". A few weeks later the committee was officially dissolved. Foreign Minister Gunnar Bragi Sveinsson said that "the process has been suspended. But nothing has been closed down." In October 2013 Benediktsson stated that no decision on ending Iceland's membership bid would be made until a report being prepared by the government on negotiations and "the recent changes within the union" was completed, expected to be by the end of 2013. Benediktsson went on to say that "we will see if a proposal will be put before the parliament or not." On 12 March 2015, Foreign Minister of Iceland Gunnar Bragi Sveinsson stated that he had sent a letter to the EU withdrawing the application for membership, without the approval of the
Althing The Alþingi (''general meeting'' in Icelandic, , anglicised as ' or ') is the supreme national parliament of Iceland. It is one of the oldest surviving parliaments in the world. The Althing was founded in 930 at (" thing fields" or "assemb ...
, though the European Union stated that Iceland had not formally withdrawn the application. In 2017, Iceland's newly elected government announced that it would hold a vote in parliament on whether to hold a referendum on resuming EU membership negotiations. However, in November 2017 that government was replaced by a coalition of the Independence Party, the Left Green Movement and the Progressive Party; all of whom oppose membership. Only 11 out of 63 MPs are in favour of EU membership. There was a renewed call in 2022 for a referendum on resuming EU membership negotiations.


Timeline

EU affiliation ahead of membership application *1970-01-01: Iceland joins
EFTA The European Free Trade Association (EFTA) is a regional trade organization and free trade area consisting of four European states: Iceland, Liechtenstein, Norway and Switzerland. The organization operates in parallel with the European U ...
. *1992-05-02: Iceland signs EU Association Agreement (entering the EEA). *1994-01-01: EU Association Agreement entry into force. *2001-03-25: Iceland joins the
Schengen Area The Schengen Area ( , ) is an area comprising 27 European countries that have officially abolished all passport and all other types of border control at their mutual borders. Being an element within the wider area of freedom, security and ...
. EU membership application and the preparational phase *2009-07-17: Iceland submits EU membership application. *2009-09-08: European Commission presents legislative questionnaire to Iceland. *2009-10-22: Iceland responds to questionnaire. *2010-02-24: European Commission recommended that the Council open accession negotiations with Iceland. *2010-06-17: Iceland officially recognised as an accession candidate by the European Council. *2010-07-26: The Council approved the framework for accession negotiations with Iceland. *2010-07-27: Preparational phase of the membership negotiation process starts (Accession Conference nr.1). *2010-11-15: Screening process started. *2011-06-21: Screening process ended. EU membership negotiations *2011-06-27: Accession Conference nr.2. Real negotiations started with the first four chapters being opened, of which two were completed and closed on the same day. *2011-10-19: Accession Conference nr.3. Two chapters were opened and closed immediately. In total 6 out of 33 chapters have now been opened (of which 4 have been closed). *2011-12-12: Accession Conference nr.4. Five chapters were opened, four were closed immediately. In total 11 out of 33 chapters have now been opened (of which 8 have been closed). *2012-03-30: Accession Conference nr.5. Four chapters were opened and two chapters were closed. In total 15 out of 33 chapters have now been opened (of which 10 have been closed). *2012-05-24: Proposal for a national referendum on discontinuing accession talks with the European Union rejected with 34 votes against and 25 in favour. *2012-06-22: Accession Conference nr.6. Three new chapters opened. In total 18 out of 33 chapters have now been opened (of which 10 have been closed). *2012-10-24: Accession Conference nr.7. Three new chapters opened. In total 21 out of 33 chapters have now been opened (of which 10 have been closed). *2012-12-18: Accession Conference nr.8. Six new chapters opened and one more chapter closed. In total 27 out of 33 chapters have now been opened (of which 11 have been closed).


Negotiation progress


A document explaining the general process and each chapter
*Situation of policy area at the start of membership negotiations is according to th
2010 EC Opinion

Timetable for screening meetings 2010–2011
The screening is a series of meetings between the commission and the applicant country examining the level of fulfilment of the EU acquis. It allows candidate countries to familiarise themselves with the acquis and it allows the Commission and the member States to evaluate the degree of preparedness of candidate countries prior to negotiations.


Political parties' stances


Public opinion

A poll released in January 2014 found that 67.5% of Icelanders support holding a referendum on the continuation of accession negotiations. On 22 February, the governing parties agreed to formally withdraw the membership application, without first holding a referendum on the matter, and submitted a bill to parliament seeking their approval to do so. The decision led to thousands of protesters taking to the streets outside of the Parliament buildings in Reykjavík. By 28 February 82% were in favour of holding the referendum. More than 40,000 people (16.5% of Iceland's voters) have signed a petition demanding that the promised referendum be held. On 25 February,
Ragnheiður Ríkharðsdóttir Ragnheiður Ríkharðsdóttir (born 23 June 1949) is an Icelandic politician. She was a member of Alþingi for the Independence Party from 2007 to 2016 and the mayor of Mosfellsbær from 2002 to 2007. Personal life Ragnheiður's father was R� ...
, Chairman of the parliamentary group of the Independence Party, announced her intention not to vote in favour of the proposal. In early March, the EU ambassador to Iceland said that the country could keep its application suspended rather than having to decide between resuming negotiations or formally withdrawing the application, "but of course not for an unlimited period of time". The bill was not approved before parliament's summer recess. Various polls have been taken on the public opinion of starting accession negotiations, joining the EU or adopting the
euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
.


Comparison with EU countries

If Iceland were admitted to the EU, it would be the smallest member state in terms of population. Its area (103,000 km2) is somewhat close to the average for EU countries (165,048 km2), but it would be the least densely populated country in the EU. The table below shows its population and population density in comparison to some of the other
member states A member state is a state that is a member of an international organization or of a federation or confederation. Since the World Trade Organization (WTO) and the International Monetary Fund (IMF) include some members that are not sovereign s ...
. Iceland's GDP per capita is among the highest in Europe as is shown in the following tables: The
Icelandic language Icelandic (; is, íslenska, link=no ) is a North Germanic language spoken by about 314,000 people, the vast majority of whom live in Iceland, where it is the national language. Due to being a West Scandinavian language, it is most closely re ...
would be one of the official languages of the EU with the least speakers in terms of native speakers (together with
Irish Irish may refer to: Common meanings * Someone or something of, from, or related to: ** Ireland, an island situated off the north-western coast of continental Europe ***Éire, Irish language name for the isle ** Northern Ireland, a constituent unit ...
and Maltese). ;Comparison to the EU and impact of joining


Diplomatic relations between Iceland and EU member states


See also

*
Icelandic European Union membership referendum A referendum on the resumption of European Union membership negotiations has been proposed to be held in Iceland. The referendum was suggested after the Independence Party and the Progressive Party formed a coalition government following the ...
*
Greenland–European Union relations Greenland, an autonomous territory within the Kingdom of Denmark (which also includes the territories of Denmark and Faroe Islands) is one of the EU members’ overseas countries and territories (OCT) associated to the European Union. Greenland ...
*
Future enlargement of the European Union There are eight recognised candidates for membership of the European Union: Turkey (since 1999), North Macedonia (2005), Montenegro (2010), Serbia (2012), Albania (2014), Moldova (2022), Ukraine (2022), and Bosnia and Herzegovina (2022). Kosov ...
* Norway–European Union relations *
Faroe Islands and the European Union The Faroe Islands, a self-governing nation within the Kingdom of Denmark, is not part of the EU, as explicitly asserted by both Rome treaties. The relations of the Faroe Islands with the EU are governed by a Fisheries Agreement (1977) and a Free T ...
*
United Kingdom–European Union relations Relations between the European Union (EU) and the United Kingdom of Great Britain and Northern Ireland (UK) are governed, since 1 January 2021, by the EU–UK Trade and Cooperation Agreement (TCA). Relations trace back to the foundation of the Eu ...
* Arctic policy of the European Union


Further reading

* Baldur Thorhallsson. 2019.
Iceland and European Integration
" in the Oxford Research Encyclopedia of Politics.


References


Notes


External links

;Official websites
Iceland's application to the EU
Icelandic Ministry for Foreign Affairs
Icelandic mission to the EU
Icelandic Ministry for Foreign Affairs

European External Action Service

European External Action Service
European Union – Icelandic trade relations
European Commission ;News Portal
All related news on the Icelandic negotiations for EU membership
, MBL ;Lobbyist organisations
Iceland's EU Debate

Evrópusamtökin, cross-political organisation of Icelandic EU supporters

Evrópusamtökin, Euroblog

Heimssýn, the cross-political organisation of Icelandic eurosceptics

Icelandic Pro-EU membership website

Icelandic Anti-EU Membership

Yes-movement of Icelandic EU supporters
{{DEFAULTSORT:Accession Of Iceland To The European Union
Iceland Iceland ( is, Ísland; ) is a Nordic island country in the North Atlantic Ocean and in the Arctic Ocean. Iceland is the most sparsely populated country in Europe. Iceland's capital and largest city is Reykjavík, which (along with its ...
2009 in Europe 2009 in the European Union 2009 in Iceland 2009 in international relations