A majority therefore rejected even the opportunity to find out what terms Brussels might offer them.
That is precisely what makes the result politically awkward for the EU. Iceland is about as close to an ideal candidate as the bloc could hope for. It is exceptionally wealthy, democratic and politically stable, with institutions closely aligned with those of the EU.
Through the European Economic Area, it already participates in the single market. It is also part of the Schengen Area and a member of NATO. Brussels would therefore not have to spend years bringing Iceland into economic and institutional alignment.
Why an Ideal EU Candidate Still Said No
The timing should also have favored the pro-membership camp. The geopolitical importance of the Arctic is growing rapidly, with neighboring Greenland moving to center stage in global politics, while the war in Ukraine has underscored the value of stronger European ties.
EU supporters also made an economic case: membership could pave the way for Iceland to adopt the euro and benefit from significantly lower interest rates. High rates and the cost of living were among the central issues of the campaign.
Even that was not enough. Against those potential benefits stood fears of surrendering control over fisheries and part of Iceland’s national sovereignty. For Iceland, fishing is not a marginal cultural issue but a strategic economic interest.
Many voters therefore appear to have concluded that the current arrangement serves Iceland better: access to the European single market while retaining greater control over its natural resources. Protecting the country’s fishing waters was one of the key factors behind the outcome.
Nor is the case for lower interest rates as clear-cut as it appears. They would make mortgages cheaper and increase the amount households can borrow. Given the limited supply of housing, however, part of that benefit is gradually capitalized into higher property prices. Cheaper mortgages, therefore, do not automatically mean cheaper housing.
The Icelandic vote represents a painful blow to the European Union’s enlargement policy. If the EU cannot persuade one of Europe’s wealthiest, most stable and institutionally best-prepared countries even to explore the terms of membership, that should serve as a warning to Brussels.
Originally published on the author's personal website lukaskovanda.cz.
