Iceland Votes on Whether to Resume EU Membership Talks

Icelanders headed to the polls on Saturday to decide whether the country should resume European Union membership talks, a vote that could have economic and security implications beyond the borders of the tiny Arctic island nation.

The election comes 13 years after Iceland, under a eurosceptic government, last paused EU accession negotiations, believing the country would fare better outside the bloc.

However, much has changed since then. Security concerns in the Arctic have escalated amid Russia's war in Ukraine and US President Donald Trump's threats to annex neighboring Greenland, while the cost of living has soared and Iceland's crown has remained volatile.

Prime Minister Kristrun Frostadottir, whose pro-EU Social Democratic Alliance leads the polls, said she would respect any choice made by the people. If Icelanders vote “yes,” the country could begin years-long negotiations with Brussels to agree on membership terms, followed by a second referendum on formally joining the EU.

“If the answer is ‘no,’ all speculation on EU membership will be shelved,” Frostadottir said.

A knife-edge vote

Recent polls show Icelanders are almost evenly split on the proposal. A Gallup poll this week showed 51.6% of respondents opposed new talks on EU membership, while 48.4% supported them. An earlier survey by pollster Maskina showed a narrow majority of 51.3% in favor of resuming negotiations.

Gabriella Gricius, associate professor of strategy at the Norwegian Military Academy, said Iceland's lack of armed forces makes it “dependent on NATO and specifically the US for security.” “With the US becoming less predictable and, specifically, rhetoric about Greenland becoming more concerning, it makes sense that Iceland is looking for additional security guarantees through the EU,” Gricius told Al Jazeera.

Adam Fishwick, a lecturer in international relations at the University of Iceland, said expected benefits of membership include lower inflation, a more stable currency, and fewer customs barriers for consumers. “There could also be regional development opportunities for Iceland, which is a big deal, through access to EU-specific funds,” he said.

However, the debate over EU membership remains “quite polarized,” he noted. Opponents fear the small nation of 395,000 people would “lose control over everyday policy decisions” and have limited influence in a bloc of larger European powers.

Impact on inflation and currency

The benefits of EU membership for Iceland are not as clear-cut as for other prospective candidates. Iceland is relatively wealthy, a member of the Schengen area and the European Economic Area, and thus already enjoys much of the access to the common market as it would as an EU member.

However, the country has experienced growing economic difficulties in recent years, mainly related to the cost of living. Consumer prices in 2025 exceeded those of any EU country and were 87% higher than the EU average. Iceland's crown is vulnerable to exchange-rate fluctuations, which erodes investor confidence and raises borrowing costs. Earlier this year, Iceland's finance ministry concluded that the cost of maintaining a national currency likely outweighs the benefits. Adopting the euro could help lower interest rates and transaction costs.

Joining the EU could address both issues. Iceland would become part of the EU customs union, where goods move freely between members and face a common external tariff on imports. It could also adopt the more stable euro.

Fisheries sector's fears: ‘The backbone of the economy’

A major concern is the impact on the fishing industry, the economic mainstay that contributed directly about 8% of GDP in 2024. If Iceland joins the EU, it must comply with the bloc's Common Fisheries Policy, which regulates European fishing fleets and fish stocks. Iceland's fishing industry fears this could lead to new catch quotas, increased foreign competition, and a loss of control over local fishing policies.

“The fundamental objection to EU membership is that Iceland will not retain full control over fisheries – traditionally the backbone of the economy,” Valur Ingimundarson, professor of contemporary history at the University of Iceland, told Al Jazeera. He argued that even if Icelanders vote “yes” to negotiations, the country is unlikely to move toward membership without securing “solid” exemptions for its fisheries.

‘Additional security guarantees’

Heightened Arctic security pressure, along with uncertainty over US commitment to traditional European partners, is contributing to Iceland's renewed interest in the EU. Although a founding NATO member with a 75-year defense pact with the US, Iceland has no standing armed forces and sits at a geopolitical flashpoint where both Russia and the US want to project power.

While Russia expands its military presence in the Arctic, President Trump has repeatedly threatened to use force to seize nearby Greenland. Professor Ingimundarson said EU supporters in Iceland view “the EU as a source of political and economic protection for a small state facing great-power politics and US uncertainty.”

Iceland's Foreign Minister Thorgerdur Gunnarsdottir said membership would be “a valuable addition,” although NATO and the US remain core security partners. Iceland has been “disappointed” by “the US pressure campaign against the Greenlanders and Denmark.” She also stressed Russia is a security threat “in our waters and nearby, in the North Atlantic.”

According to Professor Gricius, Iceland's EU membership would extend EU territory deeper into the North Atlantic, potentially increasing the bloc's strategic focus in the region. “Iceland's EU membership doesn't necessarily change Arctic security dynamics, as Iceland is an Arctic state. However, it could influence how the EU behaves in the Arctic, as the EU would include 4 of the 8 Arctic states – Iceland, Finland, Sweden, and Denmark.”