Iceland's EU accession talks fail again as referendum defeat looks likely

[Financial News] Iceland, which had already scrapped EU accession talks in 2015, has once again chosen to oppose membership in a referendum on whether to resume negotiations.
According to Icelandic public broadcaster RÚV, the referendum held on the 30th showed opposition leading with 52.5% to support's 47.5%, based on about 190,000 votes counted. RÚV said the result was unlikely to change, as only a small number of ballots remained uncounted at one of the six counting centers.

Support had led slightly at the start of counting, but the result flipped as more ballots were tallied, with the gap gradually widening. A poll released the day before the vote showed 51.6% opposed to restarting talks, narrowly ahead of 48.4% in favor.

With a population of just 400,000, Iceland has long been courted and pressured by both sides since the Cold War because of its location near the Arctic Ocean and the former Soviet Union. After gaining independence from Denmark in 1944, Iceland joined the North Atlantic Treaty Organization (NATO) in 1949. Although it has no military or intelligence agency, it is protected under NATO on the condition that no foreign troops are permanently stationed there. In 1951, it signed a mutual defense agreement with the United States.
Iceland, a wealthy Arctic nation with the world's fifth-highest GDP per capita, is not an EU member, but it is already part of the European Economic Area (EEA) and trades relatively freely with the EU. It is also a member of the Schengen Agreement, which recognizes much of EU law and allows free movement within member states.
Iceland first applied for EU membership in 2009, after the collapse of three major domestic banks pushed the financial crisis to its peak in 2008. After recovering from the economic downturn, Iceland froze accession talks in 2013 amid concerns that the Eurozone, which uses the euro in 21 countries, could collapse following the debt crisis in southern Europe, including Ancient Greece. In March 2015, it asked the EU to remove it from candidate-country status.

The ruling party led by Prime Minister Kristrún Frostadóttir currently supports EU membership on security grounds. Iceland has recently drawn the attention of major powers as global warming and the opening of Arctic routes have prompted Russia and China to accelerate development in the Arctic region. Meanwhile, U.S. President Donald Trump, who took office last year, had openly claimed even before his inauguration that Denmark's Greenland should be annexed. Billy Long, the U.S. ambassador to Iceland, sparked controversy in January by telling members of Congress in private before his appointment that "Iceland will become the 52nd state of the United States" and that "I will be the governor."

Meanwhile, the anti-EU camp argued that joining the bloc could strip Iceland of its independent legislative and regulatory authority. In particular, it fears losing control over fisheries, a key industry that accounts for 40% of exports.


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