Icelanders should vote to restart negotiations to join the EU not because they are scared by Donald Trump’s Arctic sabre-rattling but for positive, economic reasons, according to the island’s prime minister.
Kristrún Frostadóttir told the Financial Times that Iceland hoped to continue to be “in the middle” of the US and Europe geopolitically, as the Arctic island of 390,000 people gears up for a referendum by 2027 on resuming its EU bid that it dropped more than a decade ago.
Some diplomats and commentators have suggested that Trump’s military and economic threats against Denmark as part of his efforts to take control of Greenland could force Iceland and Norway to consider joining the EU for support.
“I think Trump is good news for all those who want to get Norway and Iceland into the EU, just as Putin was good at getting Finland and Sweden into Nato,” said one senior European politician recently.
Asked whether Trump’s comments on Greenland could affect Iceland’s EU debate, Frostadóttir replied: “It’s important in terms of discussing whether to open negotiations with the EU, or if that ends in a yes [then joining the EU], that people do it not because they’re scared or because they think they need to or are forced to.”
The Social Democrat prime minister added that Icelanders should vote yes “because they support this as [a] step forward in terms of the economy, in terms of culture”.
Discussions about joining the EU have long been controversial in Iceland, a member of Nato. Immediately after the 2008-09 global financial crisis that hit Iceland perhaps more than any other country, its previous Social Democrat-led government applied for EU membership and started accession talks without holding a referendum first.
The talks were abruptly called off by two centre-right parties in 2013 over sovereignty concerns and disagreements with Brussels on fisheries.
A referendum on restarting the process has been mooted ever since, and was formally included in the programme of Iceland’s new government at the end of last year. Out of the three-party coalition, Frostadóttir’s Social Democrats and the Liberal Reform party support restarting negotiations with the EU about a possible accession while the populist People’s party opposes it.
Frostadóttir said she wanted the government to make progress on “domestic” issues such as housing, welfare and the economy before moving to a debate on the EU. Due to the often “simplistic” debate about the EU, the government has set up a panel of experts to weigh the pros and cons of retaining the Icelandic króna over the euro.
New EU members are eventually required to adopt the common currency, unless they secure an opt-out like Denmark or if they consistently fail to meet economic criteria for joining the Eurozone.
An opinion poll last month showed 45 per cent of Icelanders in favour of joining the EU and 35 per cent against it. More than half wanted to get rid of the króna due to strong inflation and some of Europe’s highest interest rates in recent years.
Trump’s aggressive attention on Greenland has drawn extra focus on to the Arctic and its geopolitics, as smaller nations seek to keep their peaceful view of the far north instead of becoming an arena for competition between large powers.
Iceland became independent from Denmark in 1918 and a republic in 1944 but does not have a military and has had close defence ties with the US and Nato for decades.
“We see some similarities” with Greenland, Iceland’s prime minister said ahead of Greenland’s parliamentary elections next month, in which independence from Denmark is likely to be a prominent topic.
Frostadóttir said that if Greenland chose to emulate Iceland and become independent while too small to have a regular army, it would probably need to rely on outside support. “We’re able to be here without a military because we have agreements with Nato, with the US.”
She added that Iceland was “very well connected to the outside world” in terms of its economy and transport, having become a significant tourist attraction — something Greenland has said it wants to learn from.
But Frostadóttir said Iceland needed to ensure its tourism was “sustainable”, as millions of visitors from Asia and the US as well as Europe put strains on infrastructure and housing.
The Icelandic prime minister also said the island needed to think carefully about how to use its abundant power sources via geothermal and hydroelectric plants. Aluminium smelters are the main consumers but data centres are growing in importance.
“We need to be aware that we sit on resources that a lot of other countries don’t have. Historically, we went through the route of exporting our power through aluminium. Should we be using new energy for something else? There’s a high requirement that new energy that is harvested goes to green industries.”
