Europe, explained.
Tourists watch as lava flows from the volcano in Fagradalsfjall, Iceland, around 40 kilometres from the capital Reykjavik (Jeremie Richard/AFP via Getty Images)
Just like the country’s volcanoes, Icelandic politics is about to explode with a divisive referendum on EU membership.
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Fickle Iceland in a geopolitical pickleFickle Iceland in a geopolitical pickle
If there were a song that perfectly captures Iceland’s confused national mood ahead of a referendum on resuming stalled talks to join the European Union, it would be Icelandic songwriter Björk’s “Possibly Maybe”.
Just like the ballad’s voyage through the emotional limbo of a dithering romance, Iceland has long tied itself in knots over whether it wants the EU’s warm embrace or to remain alone in the cold.
Iceland first flirted with EU entry 17 years ago at a time when its economy was in tatters from the global financial crisis and the collapse of three major banks. It formally dropped out as an EU candidate by 2015, but now the issue is back on the agenda with a referendum slated for August 29. If Icelanders vote yes to talks resuming, a second referendum will be needed once negotiations are finalised.
This time round, following a solid economic recovery, it’s likely that national security will dominate Iceland’s thinking.
The mentality of believing Iceland is a “small and insignificant country” out of sight and out of mind, in 2026, is naive, bordering on reckless.
The country of 400,000 is a NATO member with no military of its own. It has long been considered one of America’s “unsinkable aircraft carriers” and depends on the United States for security.
Could geopolitical chaos, tariff tantrums and Trump’s hankering to take neighbouring Greenland be enough to scare Icelanders into the EU’s fold?
All of Trump’s arguments about the need for America to control Greenland for security reasons – strategic significance, because of the Greenland–Iceland–United Kingdom (GIUK) gap – also apply to Iceland. The awkwardness of the US President regularly mixing up Iceland and Greenland and a terrible joke by Donald Trump’s next envoy to Reykjavík that the country will become the 52nd state and he’ll be governor, has not gone unnoticed.
A rich and squeaky-clean country like Iceland could be an asset to the EU and wouldn’t carry the corruption baggage of others sitting in the waiting room. EU Commissioner for Enlargement Marta Kos is frothing with excitement: “In a world that is changing fast, the European Union offers an anchor in a community of values, prosperity and security.”
Iceland Foreign Affairs Minister Borgerdur Katrin Gunnarsdottir, right, shakes hands with EU High Representative for Foreign Affairs and Security Policy Kaja Kallas on 18 March 2026 in Brussels, Belgium after agreement that an enables EU missions to operate in Iceland (@kajakallas/X)
The most controversial issue last time concerned control over fisheries. Back then, there was bad blood between Britain and Iceland over the so-called Cod Wars from the 1950s–70s and contemporary tensions over mackerel.
Icelanders are adamant that if Reykjavík’s negotiators return home with a deal that does not protect territorial waters from foreign fishers, then they will be run out of the country.
But there are signs that Brussels might be prepared to offer a carve-out.
“Definitely room for flexibility,” the EU’s oceans commissioner Costas Kadis told the Financial Times.
Everything else could be easy breezy. The Arctic island already has a toe dipped in the EU pond – it’s part of the Schengen passport-free travel zone, the free trade association and the European Economic Area (single market). According to an EU insider speaking to Politico, countries like Norway and Iceland are already 80% there. The process could be short and sweet – done and dusted by 2028. Full membership would mean applying EU legislation to agriculture, regional affairs, customs and monetary policy if Iceland were to adopt the Euro.
A recent Gallup poll found the referendum could be tight – 52% of people surveyed would vote yes, while the rest opposed resuming negotiations.
Iceland’s Prime Minister Kristrún Frostadóttir maintains the country will play hard to get. “We will not enter on just any terms,” she told local media.
Sigmundur Davíð Gunnlaugsson, who was PM from 2013–16 and led a government that withdrew from the original accession talks, believes Iceland had dodged a bullet by “standing outside of the EU’s burgeoning problems”. He points out that Iceland appears to be the only country in which people believe the EU accession process is a negotiation, not a job interview.
“I still get shivers when I think of all the times when EU representatives were told that we were applying not because we necessarily wanted to join the EU, but because we wanted to take a peek and see what was on offer. Often, they simply didn’t understand what we were talking about. When they did, they were usually flabbergasted and then tried to explain to us, as though they were talking to children, that this was not the way an EU application works,” he wrote in The Spectator.
“The accession process is only designed to allow the applicant to convince the EU that it can fulfil its criteria and start doing so.”
In March, Gunnlaugsson faced scrutiny in Iceland’s parliament about his party’s links to the MAGA movement. MAGA types are also busy next door, pushing US interests in Greenland.
There are fears that outside actors could try to shape Iceland’s referendum debate. “Foreign interference will not be tolerated, whether from the European Union, China, Russia or the United States,” Prime Minister Frostadóttir said.
Regardless, Iceland, a nation of obsessive weather watchers, must now attune itself to the geopolitical headwinds. The mentality of believing Iceland is a “small and insignificant country” out of sight and out of mind, in 2026, is naive, bordering on reckless.
The chance to claim a place in Europe is now or never. As Björk sang: “It’s in Our Hands.”
About the author
Lisa Martin
Lisa Martin is an Australian journalist based in Copenhagen. She is a four-time Walkley Award finalist.
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