Iceland should withdraw EU bid and seek national consensus

In a submitted article published by mbl.is, Elías Elíasson argues that Iceland should withdraw its current application to join the European Union and only reapply if the bloc agrees to complete negotiations before deciding on accession and the subsequent adjustment process.

Elíasson writes that the recent vote showed Icelanders see themselves as culturally aligned with the nations of Europe. However, he says there is little doubt that most of those who voted no on August 29 do not want Iceland to join the EU. He argues that the accession process proposed by the EU, in which membership is effectively decided before negotiations on adjustment take place under EU supervision, is unsuitable for Iceland.

According to Elíasson, Iceland should not join until it is clear how the effects of its distinctive circumstances can be reduced. These include limited resources, a small population and the country’s distance from Europe’s major transport corridors, which draw industry, trade, people and capital away from peripheral regions.

Transport created Europe’s internal market

For centuries, the arts, culture and industry developed in trading areas along Europe’s main transport corridors and major rivers, including the Rhine, Danube and Po. Industry was based on local resources such as agriculture, coal, timber and steel.

The transport corridors attracted people and capital from peripheral regions, while major powers emerged with shipping links from port cities at river mouths. After the Little Ice Age, these regions became connected first by railways and later by roads. Markets and industrial areas expanded, drawing in still more people and capital and allowing production facilities to grow.

It became easier to find specialised workers for temporary jobs, while working conditions and rights had to be coordinated. Elíasson writes that the agreements creating Europe’s internal market were a logical consequence of this development, driven and shaped by advances in transport and related technology.

Iceland’s distinct circumstances

Transport has contributed to improved living standards in Iceland in the same way as in Europe, Elíasson writes. Iceland’s resources, however, are different and its population is small.

Without safeguards, Iceland would become a peripheral EU region that supplied people, capital and raw materials to industries closer to Europe’s transport corridors, he argues. Icelandic industry is based on energy, seafood and agricultural products from land that produces less than land in more southerly regions. Agriculture therefore needs protection for food security, he writes.

Iceland must also maintain sufficiently good transport links to allow its industries to specialise and expand their production facilities. At the same time, the country needs to address the economic instability that drives industry towards more stable environments near Europe’s transport corridors and their markets.

Elíasson writes that better transport and greater economic stability are closely linked tasks for Iceland.

Growth opportunities

Elíasson cites Marel, a company that develops technology to increase productivity, and Kerecis, a company focused on innovation in the use of products, as examples of growth opportunities linked to marine resources.

Both companies initially built their businesses on proximity to fish processing. As they grew, strong transport links to larger markets and a stable financial environment became more important, Elíasson writes.

He says either factor could determine whether the companies’ development and growth plans continue, regardless of the other factor. Both companies now have their headquarters abroad.