Iceland urges EU bid restart as Arctic competition, global trade pressures mount

Iceland should join the European Union to strengthen its economy and resilience in an era of rising Arctic competition and global trade tensions, the country’s finance minister has said ahead of a public vote on restarting accession talks.

The referendum, set for August 29, will not decide on membership itself but on whether to resume negotiations with Brussels. Any eventual deal would still require a second vote, Caliber.Az reports via British media.

Iceland, a NATO member with no standing army, sits at a strategically important North Atlantic chokepoint between Europe and Greenland.

“I think that both our economic interests and our security interests are well served by membership,” Finance Minister Dadi Mar Kristofersson said.

“The core values of a small open economy are always going to be ⁠free trade and a rules-based order, because we do not have the capacity to defend our interests by force.”

Iceland abandoned previous EU accession talks in 2013 following a change in government. The latest debate has been shaped in part by heightened geopolitical uncertainty, including tensions involving the United States and its approach to Greenland, which officials say has sharpened scrutiny of transatlantic security arrangements.

“We are the unsinkable aircraft carrier, and we will remain the unsinkable aircraft carrier,” Kristofersson said, underlining Iceland’s strategic position in the North Atlantic.

Gylfi Zoega, an economics professor at the University of Iceland, said global shifts had accelerated. “Europe ‌is on ⁠its own. And then we have to decide whether to be a U.S. military base important for the defence of the U.S. homeland or be part of Europe. And that's the big question,” he said.

Economically, Iceland remains one of the world’s most expensive countries and relies heavily on fishing, aluminium and tourism. Supporters of EU membership argue it could reduce costs, increase competition and lower interest rates.

“Iceland will never become cheap, but ... it might become cheaper,” Kristofersson said.