Listen: Could Iceland join the EU?

Production: By Europod , in co-production with Sphera Network .

EUobserver is proud to have an editorial partnership with Europod to co-publish the podcast series “Briefed” hosted by Léa Marchal. The podcast is available on all major platforms .

Find the full transcript below:

On Saturday, Icelanders will go to the polls to answer this question: Should Iceland restart the EU accession process?

The country could match the EU criteria quite quickly, but is it willing to do so? And what would this mean for Europeans and Icelanders?

Iceland is no stranger to the EU. It is already a member of the European Economic Area, the Schengen Area, as well as the European Free Trade Association.

To put it simply, all of this means that Iceland already benefits greatly from the single market, and that one can travel easily between Iceland, and the EU.

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But being an EU member has many more advantages. That’s why, back in 2009, Iceland applied for EU membership. It was well on track to complete all the requirements, but due to political changes in the years that followed, Iceland finally withdrew its application in 2015.

Now, the government coalition in power has promised to hold a referendum on EU membership. So here we are.

What do the polls say?

The latest polls suggest a very tight race, with, for now, backers of EU accession winning by a narrow margin. It’s worth saying, though, that a large number of Icelanders are still undecided.

So what if Icelanders actually decide they want to join the EU?

It’s worth remembering that this would only relaunch the negotiations. Which doesn’t guarantee the membership. But let’s assume that the accession process goes well.

Iceland would be the smallest country in the bloc, with only around 400,000 inhabitants. Malta already has more than 500,000 people.

But from an economic point of view, Iceland is richer than Malta. Its GDP is around €34bn, whereas Malta, the current smallest member, is at around €20bn.

Tourism, services, and fishing

Iceland’s economy is largely driven by tourism, services and the fishing industry.

And the country also takes advantage of its very green energy to process and transform raw materials, before exporting them.

There isn’t a particularly huge amount of raw materials in Iceland, but there is huge potential to process them using, for example, green hydropower. This is how Iceland exports a lot of aluminium.

This particular aspect is relevant for the EU, because Europeans are struggling both to mine and process raw materials.

Of course, this industry in Iceland is relatively small compared to those of other large countries. But it could still be interesting. It could contribute to the EU’s efforts to reduce its dependence on China.

Now, for Icelanders, what would EU membership mean?

Economically, this would not be a game changer, since Iceland already benefits from the single market and has a thriving economy.

Unlike some other candidates for EU membership, Iceland should be a net contributor in financial terms. What does that mean? It means that the country would send more money to the EU budget than it would receive in grants.

Aside from the economy, Iceland could be interested in getting closer to the EU for geopolitical reasons. We’ve seen how Donald Trump has repeatedly threatened Greenland, which holds a strategic position and has useful resources.

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While Iceland has not been clearly threatened, it holds a similar position then Greenland, and it has reasons to be concerned.

For all these reasons, it will be interesting to see the result of the referendum this Saturday.

And in case Icelanders vote no, they will continue to be close neighbours and allies of the EU, just like Norway.