Pálsson warns EU vote overlooks war-driven changes

In an opinion article published by Morgunblaðið, Gunnar Pálsson argues that the debate ahead of the vote on 29 August has focused too narrowly on a possible accession agreement between Iceland and the European Union. Concentrating on the bilateral relationship, including whether Iceland would receive a special arrangement on fisheries, provides only a limited view of broader developments that could significantly affect Iceland’s future circumstances as a member of the Union.

One part of that broader picture, Pálsson writes, is that the EU has become directly involved in an armed conflict in Europe for the first time in its history. The Union’s growing involvement in the war in Ukraine, which he says does not appear likely to produce a favourable outcome for European countries, has already affected their economic position, relations with one another and the outside world, as well as the Union’s institutions and methods of governance. Four and a half years after the conflict began, he writes, the war has changed the Union, and those changes are likely to shape it for many years.

The economic consequences of the war for Europe are clear, according to Pálsson. Direct spending on military equipment and support for the Ukrainian state is absorbing funds that would otherwise be used within the Union to develop infrastructure and welfare systems. The Union’s decision to cut off almost all relations with Russia, including energy trade, has hit member states hardest, he argues, because the previous supply of cheap Russian gas and oil had provided the basis for strong industrial production in leading European countries.

The interruption of fuel shipments through the Strait of Hormuz, which could last for a long time, has worsened the situation, Pálsson writes. He says little appears likely to prevent further deterioration in the Union’s economy, with rising energy costs, industrial contraction, weaker economic growth, growing debt and a deteriorating competitive position. The member states’ ability to carry out their plans to rearm Europe is also likely to face significant constraints, he argues.

The difficult conditions within the Union have also shaped its politics. In recent years, leaders have sought to focus attention on threats from outside rather than confront domestic problems. Foreign policy has consequently gained a more prominent role in the Union’s work, although the increased visibility of foreign affairs has not led to greater efforts to pursue peaceful solutions to end the fighting. Instead, Pálsson writes, the Union’s leaders appear to believe that repeated internal meetings are all that is needed. In this way, he argues, the organisation of European states, originally founded to safeguard peace, has largely lost sight of its most important goal.

The Union’s increasing militarisation has also brought changes to its institutions and working methods, Pálsson writes. Initiative in foreign and defence policy has increasingly shifted from elected representatives of the member states to unelected officials in the European Commission. He argues that the Commission’s expanded powers during earlier “weapons deals”, the euro crisis, Brexit and the Covid-19 pandemic suggest that powers of this kind are not easily reversed.