Iceland is set to hold an EU referendum on the 29th of August 2026, which will possibly restart EU accession negotiations. Having submitted an application for membership in 2009 but later withdrawing it due to disagreements over fishing policy, the Icelandic Parliament has once again chosen to put EU membership on the table (1). Despite the majority of Icelanders being in favor of a referendum, EU membership remains a controversial topic. Iceland is already a member of the Schengen Area and the European Economic Area and implements most directives without having real decision-making authority. EU membership would give it power to potentially influence regulations and laws as a whole beyond the national level. At the same time, worries regarding the EU’s Common Fisheries Policy have become a key area of concern (2).
Has the US Pushed Iceland Closer to the EU?
President Donald Trump’s threats to annex Greenland, a Danish territory geographically close to Iceland, have awoken serious concerns nationwide. As a small country with no standing army, it is incapable of defending itself in the face of a threat (3). Supporters of the referendum see EU Membership as a necessary step to ensure greater protection from allies and to break away from an unreliable and potentially dangerous US, whose ambassador to Iceland reportedly joked about it becoming the 52nd state (4). Some on the opposing side, however, argue that Iceland's status as a founding member of NATO already provides that measure of protection, and that EU Membership would not substantially contribute to its security and defence (5). Furthermore, expanded market access and trade-related advantages that come with EU membership could benefit citizens economically, as Iceland faces rising borrowing costs and inflation, despite being one of the richest nations per capita in the world.
It's All About Fish
At the center of this debate lie the Common Fisheries Policy (CFP) and sovereignty over Icelandic waters. Becoming a Member State would mean that Iceland would have to follow this EU-wide policy, losing full control over multiple sectors of the fishing industry. The CFP dictates the quantity that fleets can fish and where, and enforces equal access to waters beyond a limited coastal zone. Total catch amounts are also set annually at the EU level, based on scientific advice. These are then divided among Member States according to national quotas, thereby limiting their freedoms. Additionally, if Iceland went down this route, it would likely have to adjust its internal management system to EU rules, further changing the industry as a whole. EU membership would therefore require Iceland to transpose the CFP into national law.
Fishing is an incredibly important part of the Icelandic economy, as marine products have historically been the country’s leading export. For example, among Iceland's top exports in 2024 were fish fillets, second only to raw aluminium, and non-fillet fresh fish, which ranked third. Other marine products are also at the top of the list (6). Additionally, the fishing industry employs about 7% of the workforce and accounts for over 12% of GDP. EU-imposed rules on the nation would likely affect workers and Iceland's exclusive control over a crucial industry in its economy and culture.
Will 27 Become 28?
The referendum will ultimately determine whether Iceland reopens negotiations with the EU for accession. Although it will not directly decide if it joins the Union, it will reflect the country’s broader preferences. It must choose between membership, security, and decision-making power, or autonomy, sovereignty, and the protection of one of the main pillars of national identity.