Is the geographical location of Iceland as a European nation enough justification to classify it as a member of the European Union (EU)? As a Scandinavian country with a Norse origin just like Denmark and Sweden is all that is needed to be called a member of the EU? Can the history of the evolution of the EU be complete without the mention of Iceland? In this article, we will take a look at what makes the European Union. Let’s see its aim and if Iceland is part of this socio-economic and political bloc that is destined to change the way European nations operate.

Iceland EU member flag

The Founding of the European Union (EU)

At the end of the Second World War, many European nations were on the verge of suffering and immense destruction. There was an urgent need to ensure that such a disaster would not befall Europe again. 

This brought about many treaties, among which was the Shuman Declaration of 1950 which was intended to put a total end to the enmity between Germany and France such that it would be very difficult for countries to engage each other in war. This treaty was what led to other treaties that eventually saw the emergence of what we know today as the EU.

So, in a simple word, The European Union is the coming together of 28 European nations in the hope of bringing down every trade, economic, social and political barrier and promote peace among member nations.

Founded in 1993 with its administrative headquarters in Brussels, Belgium, the union functions on a three-branch governing system which includes:

The EU Council

This council is responsible for initiating socio-economic and political laws for the peace and co-existence of member nations. It has a presidency lifespan of six months.

The EU Parliament

These are representatives of member nations that are responsible for debating and passing into law every initiative from the EU Council. Members are represented every five years

The EU Commission

These are member nations responsible for implementing the EU laws as well as advice the parliaments on necessary sanctions on erring member countries.

The European Union also proposes and currently uses a common currency called the euro. Today it’s the second most traded currency in the global market after the US dollar.

Iceland EU member Euro currency

European Union vs. Eurozone

These are two different entities. The EU was created in 1993 as an economic bloc to foster in particular trade among member nations. The Eurozone was created in 2005 to refer to countries that use the common currency – euro.

What Currency is the Official EU Currency?

As stated earlier, the EU’s primary currency is the euro which is fast replacing the domestic currency of member nations. For example, the French franc and the Italian lira and many other local currencies are gradually fading out even in their home countries. In fact, a recent publication on the official website of the EU said that an estimate of over 340 million citizens spanning across EU countries now uses the euro as their main currency.

What Countries Make Up The EU?

As of 2019, there are 28 countries who are official members of the European Union. These countries are: 

  1. Belgium
  2. Portugal
  3. Ireland
  4. Croatia
  5. Slovakia
  6. Luxembourg
  7. Netherlands
  8. Poland
  9. Romania
  10. Malta
  11. Italy
  12. Austria
  13. Estonia
  14. Lithuania
  15. Finland
  16. Spain
  17. Denmark
  18. Greece
  19. Czech Republic
  20. Hungary
  21. France
  22. Germany
  23. Bulgaria
  24. Slovenia
  25. Latvia
  26. Cyprus
  27. Sweden
  28. United Kingdom

However, with the exception of the United Kingdom who is set to leave the union under Brexit, the number is set to reduce to 27 countries.

The Schengen Area

To ensure that there is no barrier to the free movement of people from one European country to another, the Schengen Agreement was signed into law. This law was not binding to EU member nations alone. Countries who are non-EU members also are included in this agreement.

Some of these countries that signed the Schengen agreement include: 

Austria, Poland, Lithuania, Czech Republic, Belgium, Estonia, Finland, Denmark, France, Germany, Malta, Greece, Italy, Latvia, Luxembourg, Netherlands, Portugal, Slovakia, Slovenia, Spain, Hungary, and Sweden, while the non-EU member countries are Switzerland, Iceland, Liechtenstein, and Norway. The fate of countries like Romania, Croatia, and Bulgaria to join the Schengen Area are still pending approval.

Europe map Iceland EU member country

The Schengen Agreement makes a provision for member nations to enter into each other’s territories without the use of their national passport or requiring a visa for entry.

EEA Agreement

On the 1st of January 1994, The European Economic Area Agreement was signed into law. It’s meant to bring together EU member states and three other non-EU member states – Iceland, Norway, and Liechtenstein – to enter into a single market called the “Internal Market”.

This agreement ensures that there are equal provisions and rights within the internal market for member nations. However, the operation of the market is governed by EU legislation which covers the free movement of goods, services, people, and capital.

Also, the agreement takes into account other important areas of cooperation among member states such as tourism and culture, consumer protection, education, the environment, research and development, and social policy. The EEA agreement went further to state that when a country joins the EU, it shall also apply to join the European Economic Area Agreement (EEA). This will ultimately lead to the enlargement of the EEA.

Iceland in the European Union

Iceland is a partner in signing into law some of the laws that govern the EU agreements. For example, Iceland is a signatory member of the European Free Trade Association (EFTA) which is made up of four non-EU countries and also an active signatory member of the European Economic Area Agreement (EEA). As a member of the EEA Iceland has a non-voting status in some EU programs and certain EU agencies such as the Erasmus program, environmental programs, educational programs and also research and development programs.

Iceland is also a contributing member to the “social and economic cohesion” funds in the European Union and also the European Economic Area. Iceland is part of the active participant in the EU civilian peacekeeping missions as well as a consulting member on EU foreign matters and EU foreign policy.

More so, Iceland holds a membership of the Nordic Passport Union. This includes a member of the Schengen Area, governed under the legislation of the EU as a non-voting member.

Iceland EU member flag

As a member of the Schengen Area, Iceland allows free movement of different citizens from different EU countries to enter into the country and go at will. The same movement allows thousands of Icelanders to travel to, work in and study in the EU states.

Does All This Make Iceland A Member Of The EU?

There was a time when Iceland was keen on joining the European Union. In fact, its application was submitted to the EU in 2009 by the left-wing government and subsequent negotiation was put in place to facilitate its inclusion in the EU. But several months later when the country experienced the international financial crisis negotiation, they suspended talks to join the EU in 2015.

In 2017, Iceland’s new government led by the coalition of the Independence Party, the progressive party and the Left-Green Movement. They vehemently opposed to the country’s joining the EU. They pulled Iceland out of the negotiation by having the largest vote of 63 MP’s against the EU membership to 11 MP’S for the membership.

Also, a public opinion poll conducted on same matter saw 42.7 percent of Icelanders were in favor of the country going ahead with the negotiation. While 57.3 percent were against furthering the negotiation. And since 2009, all polls conducted trying to gauge where the Icelanders stand on this matter has continued. They are still against continuing the negotiation to be part of the EU.

The Answer Is…

So, as to if Iceland is part of the EU, the answer is a big NO! 

Iceland is not a member of the EU nor is it consider as part of the Eurozone. The country still maintains its currency which is the Icelandic Kroner. 

There are several factors that have led to Iceland refusing to join the European Union amongst which are:

Protecting the fishing industry. The fishing industry places a vital role in the economy of Iceland. Becoming a member of the EU might likely disturb or have an adverse effect on the fishing industry. One time the Icelandic government had a big row with the UK government. A British fishing vessel encroached on Iceland’s waters. The Icelandic government was able to fend off this illegal encroachment. They still have its fishing boundaries extended to where it is today. The fear is that joining the EU can adversely affect the fishing industry they’ve fought so hard to maintain.

Iceland continued to hold the US as a strong ally. Over time they’ve built significant economic, military and diplomatic alliance ties together. This has also made Iceland rely less on the EU countries.

The Nordic and Scandinavian countries are reluctant to join the European Union for another reason. That they already have a similar market that is almost of the same status with the EEA. Since 1960 Sweden, Denmark, Norway, and Iceland are already founding members of the European Free Trade Association (EFTA). Instead of transforming into a political project it’s to protect certain products from their custom zones.

Is Iceland a Member of the EU?

Iceland is already a signatory member in the EEA single market. We already participate in community programs like research and development and education. We also allow an open border to other EU countries.

Also, we are already into agreement that makes us closer to the union without necessarily being an official member. And besides, there is trade balance between the country and member of the EU nations. In fact Iceland does 70% to 80% of exports and imports with EU member nations.

Brexit negotiations continue to heat up and Britain still insists on leaving the European Union. This could just be a pointer that the EU is not as strong as it claims to deliver on maintaining its promises to member nations. Perhaps Iceland is better off with its present position of maintaining its EEA and Schengen Agreement. Maybe not fully joining the European Union bloc is the smart choice.

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