Iceland’s steps towards the EU

Iceland – long-standing close ties with the EU

The German Government has always been in favour of further developing relations between Iceland and the European Union, including full EU membership for Iceland. German-Icelandic relations are close and free of problems in the political, economic, cultural and societal spheres. The Nordic island state is one of the oldest democracies in Europe. Due to its strategic location in the North Atlantic, Iceland was one of the founding members of NATO in 1949.

The country has long since had very close ties with the EU through membership of EFTA (since 1970), a free trade agreement with the EEC (since 1972), membership of the European Economic Area (since 1994) and participation in the Schengen area (since 2000). Iceland is already taking part in the EU Single Market with its four fundamental freedoms via the European Economic Area (EEA), which in addition to the EU states also includes Norway and Liechtenstein.

Application to join the EU submitted

Iceland officially submitted its membership application to the Swedish EU Presidency in Stockholm on 23 July 2009. Then on 27 July 2009, the EU Foreign Ministers decided unanimously to forward the application to the European Commission, inviting it to draw up its opinion. This decision initiated the formal accession process under Article 49 of the Treaty on European Union.

Accession process – the same for all applicant countries

The same criteria, conditions and procedures apply to Iceland as to any other applicant state.

In the opinion it now has to submit, the European Commission will examine Iceland’s ability to fulfil the accession criteria and assess the impact of Iceland’s accession on key areas of Union policy. If the European Commission delivers a positive opinion and the Council then unanimously agrees to a negotiating mandate, accession negotiations could be opened between Iceland and the EU.

Iceland would be well-prepared for accession negotiations: due to its membership of the EEA, the country has already adopted a large portion of European law, the acquis communautaire. However, the negotiations would also affect issues which are sensitive for Iceland, such as fishing, whale hunting (banned within the EU) or agriculture. At present, these spheres are not affected by EEA membership. It would therefore be too early to make any predictions about the length of the negotiation process.

Once the accession negotiations have been concluded, a referendum will be held and a constitutional amendment required before accession will be enacted. Accession itself must be ratified in Iceland as well as in all other EU member states. In Germany, both the Bundestag and the Bundesrat have to give their approval.

With about 320,000 inhabitants, Iceland would be the member state with the smallest population, followed by Malta (410,000 inhabitants) and Luxembourg (483,000 inhabitants).

Financial and economic crisis

Iceland has been hit hard by the international financial and economic crisis. Both the International Monetary Fund (IMF) and bilateral partners have now concluded assistance agreements with Iceland with the aim of stabilizing its economic, financial and monetary systems. Iceland is currently striving to tackle the consequences of the crisis with consolidating measures. It is hoped that a reformed bank system will lay the foundation for sustained economic recovery.

Under applicable law, Iceland cannot introduce the euro until it has acceded to the European Union and completed a subsequent preparatory period of at least two years, which would involve fulfilment of the Maastricht criteria.

Information on Iceland on the Website of the European Commission