Icelanders vote Saturday on whether to restart EU membership talks

Fishing industry and sovereignty concerns drive opposition

The Saturday referendum, which requires only a simple majority, will be the first national vote on EU accession since Iceland halted negotiations more than a decade ago. Supporters of reopening talks argue that joining the bloc would give Iceland leverage in an era of fraying trade norms and renewed great-power competition; opponents say it would erode control over the fishing industry, the cornerstone of the export economy, and hand decision-making to Brussels in areas where Iceland’s small size is itself an asset.

Foreign Minister Thorgerdur Katrín Gunnarsdóttir, a longtime advocate of EU membership, framed the vote as a strategic reckoning rather than a partisan question. “The international order that underpinned our security and prosperity for decades is under serious pressure,” she said. “Small nations need to think carefully about where they stand and who stands with them.”

Iceland’s inflation rate has become a central economic argument for the “yes” camp. The country’s annual inflation reached 5.6% in July under EU methodology, compared with 2.9% recorded across the euro area. Proponents argue that joining the bloc and adopting the euro would help anchor prices and lower the cost of living. Magnús Árni Skjöld Magnússon, a political science professor at Bifröst University who campaigns in favor of reopening talks, said the EU’s collective response to Trump’s Greenland pressure illustrated the bloc’s strategic value. “It meant that Germany, France and other EU allies came to their defense,” he said.

Opposition runs deepest in Iceland’s fishing industry, which dominates exports and whose leaders warn that the EU’s common fisheries policy would override national control over catch levels, fishing grounds and rules on foreign investment. Katrín Pétursdóttir, chief executive of fish-oil producer Lysi, said her company already does more business with the United States than with the European Union, exporting roughly a quarter of its products to the U.S. “I would rather look in that direction,” she said at Lysi’s Reykjavík headquarters. Iceland has been a member of the European Economic Area since 1994, an arrangement that has it adopt many EU rules while remaining outside the bloc.

Ragnar Thor Gunnarsson, CEO of cod liver company Akraborg, which is owned by Lysi, said regulatory agility was itself a competitive advantage for an Icelandic business. “We can act very quickly because we are small,” he said. “That can also work as an advantage.”

A majority of businesses surveyed in a recent poll for the Confederation of Icelandic Enterprise said they oppose EU membership. On the other side, Sveinn Sölvason, CEO of prosthetics company Embla Medical, said Iceland needs to negotiate so it can decide whether membership is the right route. “We’re in a world which is much more complex,” he said. “Where does that leave a small country that is totally dependent on free trade?”

Iceland’s security rests on its status as a founding NATO member — though the country has no military of its own — and on a bilateral U.S. defense pact sealed in 1951. A week before the referendum, ships including mine hunters from several NATO countries converged in Icelandic waters for a U.S.-led joint exercise. Erlingur Erlingsson, a senior visiting fellow at the University of Iceland’s Institute of International Affairs and a former diplomat, said the trans-Atlantic alliance had until recently been sufficient. “Until very recently, the trans-Atlantic alliance was very healthy and it served us really well,” he said. “There was no need for considering complementary security benefits.”

Trump has not threatened to take over Iceland as he has Greenland, though he appeared to confuse the two countries in a speech at the World Economic Forum in Davos earlier this year. The White House denied any mix-up. His ambassador pick, Billy Long, sparked a backlash at the start of the year when he suggested in a private conversation that Iceland would become the 52nd state after Canada. Long, who was later confirmed in the diplomatic role, apologized for the comment, calling it inappropriate and “not something that I said as a pronouncement that was serious.”

Some voters reject the idea of linking the referendum to current U.S. behavior. Haraldur Ólafsson, an atmospheric physics professor who leads a group campaigning against talks, said long-term decisions should not rest on “the current state of affairs in America.” Karolina Adamsdóttir, a first responder at Iceland’s largest airport, was more pointed: “It will destroy our economy. We have a lot of problems in our country, but the EU is not going to help us.”

Gudrún Geirsdóttir, a professor of higher education at the University of Iceland who supports exploring membership, said the Greenland episode underscored the value of being tied into European institutions. “We need to have very good international ties to allies we think are thinking in similar ways,” she said at Reykjavík’s main harbor.

Iceland’s political leaders say they would protect the country’s fishing industry in any EU talks, though industry representatives have expressed doubt about their ability to do so. EU officials have said they can be flexible about the bloc’s rules. If a deal is reached, Icelanders will vote again on whether to proceed with membership, the government says.

Reporting by Kim Mackrael of The Wall Street Journal.