Still a Reluctant European? The Past, Present and Future of Iceland’s Relationship with the European Union

Through its membership of the European Economic Area (EEA), Iceland is as closely associated to the European Union as possible without taking the final step of becoming a full member. While this arrangement has been the most, possibly the only feasible option economically and politically, it has also created an awkward constellation: Iceland a decision taker that needs to adopt in principle all legislation governing the EU’s internal market, but it does not have any real influence in shaping such legislation. This has in turn also created a double democratic deficit in that the already existing democratic deficiencies existing in the EU’s institutional architecture are exacerbated by the fact that Iceland is not at the table when EU legislation is made. Against this backdrop, this chapter explores the development of Iceland’s relationship with the EU since the creation of the European Economic Area, discusses the failed membership bid in the years between 2009 and 2014, and evaluates the prospects for a renewed membership bid in the wake of the current geopolitical developments and, more specifically, the current government’s announcement to hold a referendum on continued accession negotiations by 2027 at the latest.