Iceland and the European Union
The euroskeptics were emboldened in their opinion that they are better off outside of the EU, but in the European Economic Area - just like Norway, Denmark, and now Iceland. The conclusion was the EU was only attractive for have-nots and those who resist reform.
Iceland is planning to formally withdraw its EU application, the country’s prime minister told the national radio station. Reykjavik also wanted to lift capitals controls imposed on Iceland by Brussels after a financial crisis hit the country in 2008. Despite expected public protests, Iceland is going to make a second attempt to withdraw its application to become a member state of the European Union, Prime Minister Sigmundur Davið Gunnlaugsson said 06 January 2015 in an interview with Icelandic radio station Bylgjan. “Both due to changes in the European Union and because it’s not in line with the policies of the ruling government to accept everything that the last government was willing to accept. Because of that, we’re back at square one,” he said.
Iceland has dropped its application to join the European Union, the country's foreign ministry announced on 12 March 2015. "The government considers that Iceland is no longer a candidate country and requests the EU to act in accordance with this from now on," said the ministry's statement. The conclusion was reached at a cabinet meeting, it said. The ruling center-right coalition had been staunchly against EU accession since taking power in 2013.
On 17 June 2010 European Union leaders formally decided to begin accession talks with Iceland. On 16 July 2009 the Parliament of Iceland voted in favor of presenting an application for membership in the EU. The application for membership is submitted to the Council, which decides whether to initiate the procedure laid down in the Treaty and ask the Commission to provide its opinion on the application. In the light of the Commission's recommendation, the Council unanimously decides whether to grant candidate country status to the applicant country.
Iceland's relation to the European Union is mainly based on the Agreement on the European Economic Area (EEA) which came into effect in 1994. Iceland is not a member of the European Union (EU). In essence, the EEA Agreement unites the EU member states and the three EFTA EEA states (Iceland, Liechtenstein and Norway) into one single market governed by the same basic rules (Acquis Communautaire). These rules cover the so- called four freedoms free movement of goods, capital, services and persons, and competition rules.
Iceland has fully implemented the Schengen Agreement since 25 March 2001, which ended internal border checkpoints and controls. Citizens of countries implementing the Schengen Agreement can cross the internal borders of the implementing countries at any point without checks. The Icelandic Embassy in Brussels serves as the mission to the EU. The majority of its activities evolve around issues related to the EEA Agreement and the Schengen Convention. Most Icelandic ministries have a Counsellor at the Embassy that focuses on the policy areas involved.
The Agreement on the European Economic Area (EEA) extended the Single Market of the EU to three out of the four EFTA countries, namely Iceland, Norway and Liechtenstein. Switzerland, while being a member of EFTA was not a party to the EEA, having voted against membership in December 1992. Within the EEA there is free movement of goods, services, capital and persons. Citizens of all 18 countries have the right to move freely throughout the EEA - to live, work, set up business, invest or buy real estate, with a few minor limitations in certain sectors.
Since the establishment of EFTA in 1960, the European Community has been EFTA's most important trading partner. In 1972 individual EFTA countries signed free trade agreements with the EEC with the aim of abolishing import duties on industrial products. This aim was more or less achieved by 1977. The idea of a European Economic Area dates back to a joint EFTA-EEC ministerial meeting in Luxembourg in 1984 where a declaration mentioning the establishment of a European Economic Space later "Area") was adopted.
Between 1984 and 1989 the removal of obstacles to trade was undertaken on a case- by-case basis. This approach proved inadequate in the run-up to the EU's Single market Programme due to be completed by 1993. The need for a more structured arrangement and for common institutions became increasingly evident. In 1989, Jacques Delors, then President of the Commission, proposed a new form of partnership, which was to become the EEA Agreement. The EFTA states, at that time Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland, welcomed the ideas with enthusiasm; formal negotiations began in June 1990 and the Agreement was signed on 2 May 1992 in Oporto. The Agreement entered into force on 1 January 1994. Since 1 January 1995, Austria, Finland and Sweden have participated in the EEA as EU member states. Liechtenstein became a full participant in the EEA on 1 May 1995.
The Commission decided to produce a short, purely factual report for Iceland, which is part of the 2013 Enlargement package adopted by the European Commission on 16 October. The Commission concluded in its report that Iceland continues to fully meet the political criteria for EU membership and can be considered a functioning market economy. Prior to the decision to put the negotiations on hold, during the reporting period, 9 chapters of the negotiations were opened and 1 provisionally closed. Negotiations had reached an advanced stage, where in total, 27 chapters had been opened of which 11 provisionally closed since the opening of accession negotiations in June 2010.
The negotiations came to a stalemate in April 2013, when the election in Iceland was won by the centrist Progress Party, and the conservative Independence Party. When Progress Party’s Gunnlaugsson became prime minister, he froze negotiations with the EU in May 2013, largely because of the fish catch quotas insisted on by Brussels – something Iceland’s fishing industry would never agree to. Iceland is divided down the middle on the issue and there is no easy way out.
Today Iceland, with its population of about 325,000, has EU 'candidate country' status and is a member of the European Economic Area (EEA), the European Free Trade Association (EFTA), Schengen area, and is an EU partner promoting cooperation in northern Europe – all this without voting rights in the EU. Two thirds of Iceland's foreign trade is conducted with EU member states.
Key dates
- July 2009: Iceland presents its application for membership of the EU
- February 2010: Commission's Opinion on Iceland's application for EU membership
- July 2010: Start of the accession negotiations
- December 2012: Latest accession conference: 6 chapters opened, 1 provisionally closed bringing the number of opened chapters to 27 of which 11 have been provisionally closed.
- April 2013: Parliamentary elections in Iceland.
- May 2013: new government decides to put accession negotiations on hold, not to be resumed unless so approved by referendum
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