Iceland’s accession to the EU presents new ways for Europe to influence developments in the Arctic. Iceland, which was given official candidate status in June 2010, is on the Arctic Council and has a major stake in the area’s governance. With an EU accession goal of 2012, Iceland’s presence cannot go unnoticed by Arctic policy makers.

The country does not possess coastal claims to Arctic resources and this has shaped its policy stance in the last decade. During its 2002-2004 presidency of the Arctic Council, Iceland sought to foster environmental sustainability and the inclusion of indigenous peoples. These two goals resulted in several important initiatives, including completion of the ‘Arctic climate impact assessment’. Its presidency goals also called for closer ties with other international bodies, including the European Union.

ARCTIC COUNCIL WOES

Not having a coastal claim means that Iceland has been somewhat marginalised in recent years. On 29 March 2010, Canada hosted the second meeting of the ‘coastal five’ – Canada, the United States, Russia, Norway and Denmark. These countries, all with coastal claims, have stated that their increased cooperation will only serve to strengthen the Arctic Council. But Iceland, Sweden and Finland - the other three permanent Council members - all expressed concern over the meeting. Iceland warned that such gatherings might undermine the role of the Council and echoed Sweden’s sentiment that they were dissatisfied with the reasons given for the ‘coastal five’ to meet separately. Of even more concern for the three excluded members was the declaration the ‘coastal five’ produced at Ilulissat, Greenland, where the first meeting was held, on 28 May 2008. The Ilulissat Declaration reaffirms the UN Convention on the Law of the Sea (UNCLOS) as the preferred method for resolving Arctic disputes. However, UNCLOS has been widely criticised as being ineffective in resolving such disputes and Iceland recently said that it hopes EU accession will allow it to pursue better forms of multilateral governance in the Arctic.

Iceland’s EU membership is by no means certain. It was not until the financial crisis that support swung towards joining the EU. The country is already part of the European Economic Area and Iceland’s Progressive Party has pushed hard for adoption of the euro, presenting it as a solution to debt problems. The most recent Capacent Gallup polls, however, reveal support is now declining. All three 2010 surveys show a clear majority is against the idea. Iceland’s accession will be subject to a referendum once the entry details are finalised, and like Norway, the electorate may reject the idea. Also troubling is the 2008 Icesave matter, which saw 400,000 British and Dutch clients unable to access their accounts after the Icelandic bank Landsbanki was put into receivership. The UK controversially reacted by freezing the bank’s assets by using anti-terrorism legislation. Though both EU countries have said they would not block Icelandic entry negotiations, eventual accession would only be possible if the dispute is resolved.