At the weekend Iceland decided in a referendum not to pursue accession negotiations with the EU. Iceland is already a treaty member of the EEA and EFTA so is a member of the single market and pays a contribution of ISK8billion pa (about $66m pa or 0.5% of its GDP) for the privilege (see www.government.is/news/article/what-eea-participation-costs-would-be-replaced-upon-membership/).
The result was close enough (52.8%/47.2% on a turnout of 82.5%) but it’s pretty clear that EU membership is not a prospect that gets the country’s juices flowing and over the campaign polls shifted from a projected Yes vote of 53% to an actual Yes vote of 47% (see https://en.wikipedia.org/wiki/2026_Icelandic_European_Union_membership_negotiations_referendum). I have heard reference (but no source) that a significant shift in the views of younger voters accounted for much of this swing.
I think Iceland has made the correct decision: Icelanders are attached to political independence and EU membership significantly compromises this. I understand the arguments about pooled sovereignty meaning more sovereignty you can actually access, but I do not believe this is true in the reality of the 21st century. European pooled sovereignty has delivered political leadership of the class of Ursula von der Leyen and Peter Mandelson, not Charles de Gaulle or Konrad Adenauer. This fall off in quality is mirrored in the quality of politicians in member states themselves: member statehood itself is a recipe for stagnation and learned powerlessness.
Setting aside the Icelanders, the result has thrown light on a couple of political facts that are important. The first concerns the EU, the second concerns how time and direction operates in political decision making.
The EU is premised on an assumption that its technocratic model is the best for organising economic and political relations both within and between neighbouring states. Whatever this model once had going for it is now gone: Europe is an economic also-ran, with economies that fail to innovate and do not deliver rising living standards for their citizens. European performance in the 21st century is an embarrassment and the EU lies at the heart of the politics and economic approach that have delivered this outcome. The EU itself recognises that European economic malaise is a fact (see the Draghi report, which introduces itself by stating “Across different metrics, a wide gap in GDP has opened up between the EU and the US, driven mainly by a more pronounced slowdown in productivity growth in Europe. Europe’s households have paid the price in foregone living standards. On a per capita basis, real disposable income has grown almost twice as much in the US as in the EU since 2000”, full report here: https://commission.europa.eu/topics/competitiveness/draghi-report_en). What can be done about it within the EU as it actually exists is unclear.
Now, poorer countries (e.g. Georgia and Ukraine) have much to gain from EU membership as they will immediately benefit from huge fiscal transfers in the form of infrastructure grants etc, but Iceland would not get this, rather it would have been likely to have been an immediate net contributor and lost control of its fisheries.
In the aftermath of the result there was much back and forth on social media with the usual suspects showing partial grasp of the facts. What caught my eye, though, was that Remainer voices were lauding the fact that Iceland was in the EEA and EFTA and so had full membership of the single market and had “all the benefits of EU membership without any of the downsides” (I paraphrase). This was an option for the UK after the vote in 2016 yet was traduced by Remainers and Leavers alike. In the March 2019 indicative votes, the House of Commons rejected the option of joining the EEA through EFTA by 377 votes to 65 (see https://en.wikipedia.org/wiki/Parliamentary_votes_on_Brexit). In a year and a half that useless Parliament was over, Boris Johnson won his election and we were out of everything.
Now in order to rejoin the EEA or EFTA there is a mountain to climb because we continue to diverge from the single market where it is in our own interests to do so and the EU continues to develop regulations (generally adding to the stagnation and sclerosis that bedevils our continent). Remainer die-hards still seem to imagine we can just opt back into an entity as it existed a decade ago, but life and politics simply doesn’t work this way.
In 2019 I argued strongly for remaining in EEA/EFTA if only as a means to minimise disruption in exiting from the EU. I now would not: the single market more than ever is a stagnation zone that is out of kilter with a world that has moved far beyond kowtowing to the “regulatory superpower” that the EU still imagines itself to be. Economic futures will be forged outside of its diminishing regulatory ambit. Europe and European nations can play an important role in world affairs, but the EU is on a trajectory of long term decline and I think European nations will need to develop policies to address the world as it is and without reference to the EU.
The fundamental error the Remainers made in the Brexit wars was thinking that life and politics exist in a stable equilibrium: they don’t. By going for broke and thinking they could essentially overturn and ignore the results of the referendum they betrayed their own lack of understanding of the societies they saw themselves as entitled to govern. As the man said, they played a stupid game and won a stupid prize. Sadly for them they seem incapable of learning from their mistakes, and populations will continue to disappoint them.