In a setback for the government's efforts, voters in Iceland rejected the resumption of negotiations to join the European Union, which appeared to reflect a bias towards concerns related to sovereignty and control over fishing waters.

Disappointment for Brussels

The outcome of the referendum is likely to disappoint Brussels, as some EU officials viewed Iceland's accession to the bloc as "low-risk," which could help alleviate reservations about the bloc's expansion and strengthen its strategic position, especially given the increasing focus on Arctic security.

The government presented the plan to resume membership negotiations as a moment of "now or never," and Prime Minister Katrín Jakobsdóttir told voters in August that a "no" vote would put an end to speculation about joining the EU.

After casting her vote, she stated that the referendum campaign had sparked a broader discussion about Iceland's place in the world. She added, "This is a great day; we have waited for years to be able to vote," emphasizing that her government would continue its work regardless of the outcome.

The referendum results showed a slight early lead for the opposition camp today (Sunday) in a closely contested vote that reflects a sharp division over the future of the country's relationship with the bloc.

High Voter Turnout

A poll conducted by Gallup on the eve of the vote showed that 51.6% opposed resuming talks, while 48.4% supported them, a slight shift from previous polls that indicated limited support for the proponents.

Government data reported by Politico indicated a high turnout, with participation rates ranging from about 60% in the capital Reykjavik to over 80% in some rural areas. Iceland's population is less than 400,000.

Supporters believe that joining could alleviate high interest rates and provide more security amid geopolitical turmoil, while opponents argue that the move could threaten the country's sovereignty and control over fishing waters and agricultural sectors.

A vote in favor does not mean Iceland will immediately join the EU, but it grants the government a mandate to resume negotiations with Brussels. If an agreement is reached, it would need to be presented to a second public referendum, along with approval from all EU member states, according to Politico.

Although the referendum is advisory, the government stated it would abide by the result, according to Bloomberg. Estimates from the Foreign Ministry suggest that talks could begin by the end of 2026 and last between 18 and 24 months.

Interest Rates and Cost of Living

Discussions within Iceland have increasingly focused on interest rates, fishing rights, and the cost of living. The country is experiencing high inflation and interest rates that have made mortgages expensive, and proponents argue that joining the EU and possibly adopting the euro could alleviate the crisis.

Opposition leader Guðrún Hafsteinsdóttir, who led the "no" campaign, stated: "These are not problems that Brussels will solve for us. These are problems that Icelandic politicians need to solve."

Iceland is linked to the European single market through the European Economic Area agreement, which gives it broad access to EU markets without full membership, while supporters argue that it implements a large part of EU rules with little influence over decisions made in Brussels.

Main Point of Contention

Fishing quotas remain at the heart of the dispute. According to EU rules, fishing quotas are determined based on historical fishing patterns and other factors, and officials believe this could allow Iceland to retain a significant degree of control over its waters, but the opposition camp questions the sustainability of any guarantees provided by the EU.

It is worth noting that Iceland applied to join the EU in 2009 following the global financial crisis, and negotiations began the following year before being halted in 2013 due to disagreements over fishing and other issues.

The issue resurfaced after a change in government in late 2024, amid the war in Ukraine, the Iran conflict, U.S. tariffs, and President Donald Trump's threats regarding Greenland.