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Iceland heads for EU referendum

22/05/2013 | By | Reply More

It is a growing scepticism about the way the EU is moving forward


Sigmundur Davíð Gunnlaugsson, left, leader of Iceland’s Progressive party, with Iceland’s President Ólafur Ragnar Grímsson – Photo: Reuters

The two parties that emerged victorious from Iceland’s general election in April announced today, May 22.2013, they had agreed to form a government and vowed to hold a referendum on EU membership.

“We will not continue the accession talks with the European Union until after a referendum,” a government policy document signed by the centrist-agrarian Progressive Party and the right-wing Independence Party said.

EU negotiations between Reykjavik and Brussels began in July 2010, but Iceland’s foreign minister said in January it was slowing the pace of talks ahead of the April elections “to give the election campaign the room it needs”.

The new government said it would now evaluate the progress of the negotiations and the practical aspects of a referendum.

Although Icelanders are still feeling the effects of the 2008 financial crisis in the form of sliding living standards and ballooning mortgages, many do not see what benefits losing some of their sovereignty to Brussels would bring.


Leader of the Progressive Party, Sigmundur Davíð Gunnlaugsson (to left) and leader of the Independence Party, Bjarni Benediktsson (to right), sign agreement for a new goverment in Iceland.

The country already has a free trade agreement with the EU, and is part of the European Free Trade Association (EFTA) and Europe’s visa-free Schengen zone and was first European nation to made a free trade agreement with China this year.

In addition, the Icelandic economy has largely recovered from the spectacular collapse of its banking system, while Europe has continued to grapple with its debt woes.

Recent public opinion polls have indicated that a majority of Iceland’s 320,000 people are opposed to EU membership.

Most are also against the introduction of the EU’s common policies on fishing — one of the small island nation’s biggest resources. The EU talks have not yet dealt with the topic of fishing.

The decision is a blow to the EU which is no longer regarded as a safe economic haven for small nations following the eurozone crisis and comes as Britain prepares for a 2017 referendum on membership. A draft bill has been rushed out to pave the way for a 2017 referendum on Britain’s membership of the EU.

The anti-EU sentiment is increasingly being felt elsewhere in Europe, including in Britain where Prime Minister David Cameron has said he wants to renegotiate the conditions of the country’s troubled relationship with the 27-member union.


Progressive Party leader Sigmundur Davíð Gunnlaugsson will hold the post of prime minister in the new government of Iceland.

Negotiations between Reykjavik and Brussels began in July 2010 and work had advanced on 80 per cent of the 33 “chapters” required for EU membership before slowed before Iceland’s elections in April “to give the election campaign the room it needs”.

“It’s their choice,” said an EU official, according the Telegraph – UK media today.

No other candidate has pulled out during talks although Norway voted against joining the EU after the completion of negotiations in 1972.

The Icelandic referendum will fuel British debate on EU membership and was welcomed by Nigel Farage, the leader of Ukip, as “fabulous news”.

“They have really shown the way forward. Iceland clearly wants to protect its democracy, its fisheries and its economy. Little Europhiles should note that Iceland just signed a free trade agreement with China and has returned to economic growth,” he said.

“This move by Iceland shows that the EU is more and more perceived as a failing political and economic project.”

Martin Callanan MEP, the leader of the European Conservatives, which are affiliated to Iceland’s Independence Party, also welcomed the decision.

“I can well understand why Iceland is reluctant to join the EU at the moment,” he said. “It shows what a good idea a referendum is.”

The questions about EU for near future

Watch the video below, regarding the issue by interview with Iceland’s President Ólafur Ragnar Grímsson for 3 months ago.


Iceland’s new government is expected to take office on Thursday, almost a month after the April 27 legislative elections. The Progressive and the Independent parties garnered 19 seats each in the 63-seat parliament, or Althing.

Progressive Party leader Sigmundur Davíð Gunnlaugsson will hold the post of prime minister in the new government, while the head of the Independent Party, Bjarni Benediktsson, will serve as finance minister.

The new government are as follows:

 For Progressive Party: For Independent Party:
Sigmundur Davíð Gunnlaugsson
Prime Minister
Bjarni Benediktsson
Minister of Finance and Economic Affairs
Gunnar Bragi Sveinsson
Minister for Foreign Affairs and External Trade
Hanna Birna Kristjánsdóttir
Minister of the Interior
Eygló Harðardóttir
Minister of Social Affairs and Social Security
in Ministry of Welfare
Kristján Þór Júlíusson
Minister of Health
in Ministry of Welfare
Sigurður Ingi Jóhannsson
Minister for the Environment and Natural Resources and Minister of Fisheries and Agriculture
Illugi Gunnarsson
Minister of Education, Science and Culture
Ragnheiður Elín Árnadóttir
Minister of Industries and Innovation

The new ministry is appointed nine ministers – Photo: GVA

In addition to halting Iceland’s EU membership bid, the new government’s programme calls for an easing of household debt by recovering money from the creditors of Iceland’s banks that collapsed in 2008.

Gunnlaugsson has said in the past that foreign creditors of Iceland’s collapsed banks would likely need to suffer a substantial “haircut” – or reduction – on debt claims. Details of any potential new plan for dealing with foreign creditors have not yet been announced.

It also called for a simplification of the tax system to reduce taxes.


Category: Iceland

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