Protocol 35 helped secure Iceland’s EEA deal

Iceland’s entry into the European Economic Area was far from certain, as opponents warned the agreement threatened national sovereignty and the country’s constitutional system. Protocol 35 became a key compromise, mbl.is reports, intended to align EEA rules without transferring legislative power from EFTA states.

The government saw the agreement as a way to expand international trade and open the economy. But opposition was strong: 34,378 people signed a demand for a referendum, and President Vigdís Finnbogadóttir was urged to refuse to sign the legislation.

Jón Baldvin Hannibalsson, leader of the Social Democratic Party and foreign minister, made the EEA a campaign issue in 1991. Talks had begun under the previous government, led by Steingrímur Hermannsson, but there was disagreement within the governing coalition over how to proceed.

During rapid coalition talks in Viðey, Davíð Oddsson, leader of the Independence Party, agreed that the new government would make the EEA deal and wide-ranging economic reforms key goals. After difficult negotiations, the Icelandic team, led by ambassador Hannes Hafstein, believed it had secured a strong agreement with Brussels.

When Jón Baldvin presented the draft agreement in October 1991, the phrase “everything for nothing” caught on. He said people had misinterpreted his reference to Frans Andriessen, vice-president of the European Commission, but said he was pleased with the result.

Opposition parties warned that the agreement could affect Iceland’s sovereignty, ownership of industries and the legislative powers of parliament. In an August 1992 poll, 26.9 per cent supported the deal, 31.7 per cent opposed it and 41.4 per cent were undecided. By October, the two sides were nearly equal. Parliament rejected a proposal to put the agreement to a referendum by 31 votes to 28.

The government also faced the question of whether the agreement transferred state powers in a way that the constitution did not allow. If so, a constitutional amendment would have been required, followed by the dissolution of parliament and an election.

Jón Baldvin appointed a four-member committee to assess the agreement’s constitutionality. Its members were Supreme Court judge Þór Vilhjálmsson, professors Gunnar G. Schram and Stefán Már Stefánsson, and Ólafur W. Stefánsson, an official at the Ministry of Justice. In an opinion issued on July 6, 1992, the committee said the agreement did not violate the constitution. It acknowledged that limited powers would pass to foreign institutions, but said the transfer was not extensive or burdensome enough to require a constitutional amendment.