Iceland is the world’s longest running democracy. At a time when
some member-states are struggling with democracy in the face of economic crisis,
and the European institutions are still being criticised for a democratic
deficit, Iceland would therefore be a valuable and welcome member of the club.
Iceland also has much to teach the EU about energy policy: it generates three
quarters of its electricity from hydroelectricity, and the rest from geothermal
plants. All of its heat comes from geothermal.
However, the European Commission should remain firm on its negotiating
demands on fishing and whaling.
Iceland applied to join the EU in 2009, in the aftermath of its
banking crisis. The island saw EU membership as a source of stability and
economic recovery. Out of the 35 negotiating chapters, 18 have been opened. Ten
of these have been provisionally completed. Enlargement Commissioner Stefan
Füle hopes that accession negotiations will be completed in 2013 – though the
most difficult chapters, on agriculture, environment and fisheries, have not
been negotiated yet. As a member of the
European Economic Area (EEA) and Schengen, Iceland has already adopted
two-thirds of the acquis.
Iceland’s accession bid has quite broad support among
member-states. The main obstacle to its accession is that Icelanders
themselves are likely to reject it. Once negotiations are completed, Icelanders
will vote in a referendum on whether or not to join the EU. Polls suggest that
only around a quarter support EU membership, with over half against and around
a fifth undecided. The level of support for membership has fallen since negotiations
began in 2009. This is in part because Iceland’s economy has recovered from the
serious 2008 banking and debt crises, and is now growing at over four per cent
per year. And EU membership is no longer seen as a source of stability. But support for membership has also fallen
because of the European Commission’s perceived (by Icelanders) unfairness
towards Iceland over the Icesave
settlement and the current “mackerel war”. And the totemic issue of
whaling remains to be confronted.
Icesave was an online facility run by the Icelandic bank
Landsbanki between 2006 and 2008. It gained over 300,000 customers in the UK,
and over 125,000 in the Netherlands. But in 2008 Landsbanki was placed into
receivership. The British and Dutch governments argue that the Icelandic
government is obliged to pay at least €20,000 to each depositor, and that
Icelandic and foreign depositors must be treated in the same way. Reykjavik
disagrees. It argues that, had the restructured bank been
obliged to bear the full cost of the debt, it would have had a negative equity
of €2.6 billion, which would have had to be paid by Icelandic taxpayers.
Half the Icesave debt to
depositors has now been repaid. The EFTA Court will hear legal argument about the
remainder on September 18th. The time
for negotiation over Icesave has passed, since the matter is now before a
court. So the key negotiating issues are fishing and whaling. The European
Commission should remain firm on these issues. It would be counter-productive
to lower existing EU standards to attract a new member. If this firmness leads
to Iceland voting no in a referendum, so be it.
Fishing has always been a bone of contention between Iceland and
other European countries. The Common Fisheries Policy is not included in the
EEA, so Iceland can set its own policy. The fishing industry provides 40 per
cent of Iceland’s export earnings, and eight per cent of employment on the
island. The current dispute focuses on
mackerel. Iceland has increased its annual quota for mackerel catch enormously
– from 2,000 tonnes to 146,000 tonnes. Reykjavik argues that this is
sustainable because climate change is resulting in more mackerel in its waters.
The Commission disagrees, and argues that Iceland’s quota is 36 per cent higher
than it should be to be sustainable. Ireland, France, Portugal and Spain are
demanding sanctions. The Commission has threatened to block Icelandic ships
from unloading mackerel at EU ports.
The EU and Iceland (plus the Faroe Islands and Norway)
will meet in London in September to try to reach agreement. Some movement by the Commission, to defuse
the argument and avoid conflict, would be understandable. But the Commission
should not move much. It should continue to base its position on its scientific
estimate of a sustainable catch.
On whaling, the Commission should not move at all. In 2006
Iceland resumed commercial whaling of fin whales and minke whales. Thus it
joined Norway in defying the international moratorium on commercial whaling. Iceland has always caught some minke whales
for “scientific research”. So the 2006
decision made little practical difference on minke – it simply represented
Iceland becoming more open about its reasons for whaling. But it did represent
a restart of fin whale hunting. Fin whales are an endangered species. Iceland
maintains that there are enough fin whales in Icelandic waters for a small
catch to be sustainable. This may or may not be correct, but is anyway not
relevant to EU negotiations. EU law prevents the killing of any whales, even
those which (like minke) are relatively numerous. EU law is based partly on the need to protect
biological diversity, but partly also on the need to prevent animal suffering. Being killed by harpoons is a particularly
painful, and often slow, way for an animal to die.
By no means all Icelanders favour whaling. Whale watching is an
important part of their tourism industry – and increased tourism is one of the
drivers of economic recovery. Yet some Icelanders argue that whaling is an
important part of their culture and tradition. Culture is important, and
European integration must respect most cultural traditions. But not all, and
not those which involve cruelty. Iceland has an impressive culture –and has
produced some of the world’s greatest literature. So it ought to be possible,
in the twenty-first century, for Icelanders to separate their cultural heritage
from whaling. If this is not possible, EU membership should also not be
possible.
In any case, the ongoing dispute about Icesave and the Icelandic
economic recovery may well result in Iceland voting no to EU membership,
whatever concessions the Commission has offered on fish and whales. The EU
should not lower its standards whatever the rewards. To lower them and get no
reward would be particularly unwise.
Stephen Tindale [1] is an associate fellow at the Centre for European Reform