Reykjavik - Iceland's in-out cliffhanger talks on EU membership are still inconclusive

Iceland applied for European Union membership in July 2009 and was formally acknowledged by all the then 27 member states as a candidate country a year later. Accession negotiations didn’t start until summer 2011, following the screening process. In 18-months of active negotiations, prior to their being put on hold in early 2013, progress was steady. The Icelandic government at the time nevertheless had hopes of speeding up the process since Iceland is already well integrated into the European project through EFTA/EEA and Schengen.

Five main factors were slowing down the process:

• First, accession negotiations have become more cumbersome since the EU enlargements of 2004 and 2007, when in all 12 new member states joined the EU.

• Second, the international financial crisis had created difficulties for both negotiating parties in various ways, as was clearly illustrated by the diplomatic dispute between Iceland and the UK and the Netherlands over the Icesave savings deposit vow.

• A lack of unity within the Icelandic government has also hindered progress and resulted in the negotiating position for chapters like agriculture not being submitted.

• The decision by the Icelandic authorities in early 2013 to “put the accession negotiations in slow motion” until after parliamentary elections in the spring of last year caused some uncertainty within the EU regarding the continuity of the negotiations and brought parts of the accession process to a halt.

• The mackerel quota dispute that erupted in 2009 had resulted in the fisheries chapter not being opened before the accession negotiations were put on hold.

Following Iceland’s spring 2013 elections, a new coalition government of the centrist agrarian Progressive Party and the right-wing Liberal Independence Party took office. The new coalition government firmly opposes not just the accession process but EU membership. During the election campaign, its party leaders promised a national referendum on whether or not to continue the accession process.

Later in the year, the new government commissioned an Institute of Economics a report on the status of the accession talks, along with an analysis of developments within the EU. After being denied participation in the structuring of this report commissioned by government, the Confederation of Employers, the Workers Union, the Iceland Chamber of Commerce and the Federation of Trade all decided to engage the Institute of International Affairs at the University of Iceland to undertake an independent report that would focus on the issues they deem most important.

In February of this year, the government proposed withdrawal of Iceland’s application altogether. That led more than 22% of all eligible voters in Iceland to sign a petition demanding a national referendum on the issue. The proposal to withdraw was introduced within days of the publication of the government-commissioned report and before the parliament had even finished discussing it. A heated debate then arose and the main square in front of the national parliament has seen large numbers of protesters showing up at first daily, and then weekly ever since. The report commissioned by the government’s social partners was introduced in early April and has spurred further debates on the pros and cons of EU membership.

The government’s withdrawal proposal is still on the table, but the issue is also in discussion in the foreign affairs committee of the Icelandic parliament. If there is no change of heart within the ruling coalition, the odds are that the proposal will be passed early summer, making Iceland the first candidate country to withdraw its EU membership application. But there is also still a possibility of a national referendum on whether the accession talks should proceed, and that might yet yield a compromise solution of some sort.