Iceland would pay ten billion for EU infrastructure and get one back

Iceland would pay more than ISK 10 billion a year towards infrastructure in other European Union countries while receiving less than ISK 1 billion for infrastructure projects at home if it joined the bloc, according to an analysis published by mbl.is.

The calculations were prepared by economist Konráð S. Guðjónsson for the Áfram Ísland movement and published on Substack. Based on the EU’s current budget, he estimates that Iceland’s total annual payments to the union would be around ISK 50 billion.

Iceland would receive a large portion of that amount through various EU funds and grants, but would most likely receive considerably less than it paid in.

Konráð’s analysis focuses on infrastructure funding, which would mainly be provided through the EU’s Cohesion Fund and the European Regional Development Fund. He compared allocations from the funds among member states with their income levels.

His conclusion is that Iceland would probably pay several times more into the funds than it would receive. “Based on Iceland’s total payments, the overall cost of these funds to the EU and what countries with similar income levels receive in return, Iceland would pay more than ISK 10 billion a year for infrastructure in other countries while receiving less than ISK 1 billion for infrastructure in Iceland,” Konráð writes.

For comparison, the Icelandic government has allocated ISK 44 billion directly to transport matters this year. Iceland’s contribution of more than ISK 10 billion to infrastructure in other EU countries would therefore be close to a quarter of that amount.

Total payments could reach ISK 50 billion a year

Konráð also calculated Iceland’s possible total payments to the EU using the bloc’s 2026 budget. Member states’ contributions average just under 1 percent of their gross national income, with the ratio ranging from 0.9 to 1.3 percent.

Iceland’s gross national income was ISK 4,944 billion last year. Based on the Central Bank’s growth forecast, Konráð estimates that it will reach ISK 5,294 billion this year.

Using the average contribution rate among EU countries, he calculates that Iceland’s contribution would be around ISK 52 billion. He therefore considers it reasonable to assume that Iceland’s gross payments would be around or above ISK 50 billion a year, broadly in line with calculations by the Association of Taxpayers previously reported by Morgunblaðið.

Konráð says that amount is comparable to the government’s combined spending on child benefits and parental leave this year. He also notes that some costs related to European cooperation are already incurred under the European Economic Area Agreement and would disappear if Iceland joined the EU.