Next objective, Europe

On 27 June, Iceland began in-depth negotiations on entry to the European Union. The negotiations should run smoothly, with the exception of a disagreement on the fisheries industry, which is of great importance to the island’s economy.

The close ties between Iceland and the European Union are deep rooted and still very much alive. They are also a reflection of the economic situation, as more than two thirds of Reykjavik’s foreign trade is with Member States of the EU.

Since 1970, Iceland has been a member of the European Free Trade Association (EFTA); two years later it concluded a bilateral free-trade agreement with the European Economic Community. In 1994, Iceland joined the European Space Agency and the Schengen-zone, which allows Icelanders to travel and work freely throughout the European Union. Lastly, Iceland is also a signatory of the Dublin Regulation on asylum policy in Europe and a founding member of the North Atlantic Treaty Organisation, NATO.

July 2009. The country was barely coming out of an economic recession caused by an unprecedented banking crisis. The new centre-left government was in favour of the country applying to join the European Union and presented an application to the European Council. The application was accepted and the European Commission decided to amend the Instrument for Pre-Accession Assistance in order to include Iceland as a beneficiary. The aim of this assistance to Reykjavik was to facilitate its alignment with European regulations, commonly called ‘community acquis’.

Mackerel war

The alignment process should be relatively easy. “The screening process (evaluation of the degree of harmonisation of Icelandic legislation with EU law) has confirmed what we knew: Iceland is very well prepared for the accession talks and there are only a few issues to be negotiated,” Iceland’s chief negotiator Stefan Haukur Johannesson told Agence France Presse in June. The issues are few in number, but very important. Firstly, there is Iceland’s policy on the fisheries industry, which is responsible for almost 80% of Iceland’s exports; the rest being made up mainly of the re-exporting of aluminium which, thanks to an abundance of hydroelectricity on the island, is refined at low cost from bauxite reserves in Africa or North America.

“Iceland may be a small nation, but we're a giant when it comes to fishing,” said Left Green MP Arni Thor Sigurthsson, who serves as the chair of Iceland's Foreign Affairs Committee. “If Iceland were to join the EU, it would increase the EU's resources from fisheries by 50%,” he said, insisting “it is of the utmost importance for Iceland to get fair treatment in this matter.” The MP alluded to the clash between the EU and Iceland on fishing rights, recently illustrated by Iceland’s unilateral decision to increase its mackerel quota. The island is also in disagreement with the EU over whaling.

Financial services is another potentially difficult sector in which the EC believes that Reykjavik will need to make “serious efforts”.

M.M.B.