Iceland’s EU referendum: President Trump’s push for Greenland raises security concerns

Icelanders are set to vote on Saturday in a high-stakes referendum on whether to restart European Union accession negotiations, reviving a debate with deeper meaning in the wake of US President Donald Trump’s arctic saber rattling.

The question posed to the Nordic country of around 400,000 people is simply: “Should Iceland resume accession negotiations with the European Union?”

Opinion polls show the country is effectively divided on the issue, and the advisory vote is likely to be decided. If a majority of voters say yes, accession negotiations will take place and, if successful, the negotiated agreement will be submitted to a second referendum for Icelanders to approve or reject.

This comes as the Arctic emerges as a major hotbed for critical minerals, climate change causes sea ice to melt rapidly, seasonal shipping routes open, and as President Trump renews his push to acquire Greenland, Iceland’s closest neighbor.

U.S. presidents have long claimed control of Greenland on national security grounds. Notably, President Trump repeatedly appeared to confuse Greenland and Iceland in a special speech at the World Economic Forum in Davos, Switzerland, earlier this year.

Eirikur Bergmann, a political science professor at Bifrost University in Iceland, said: “All of the arguments raised by the US president about why the US should acquire Greenland actually apply equally well to Iceland. The only difference is that Iceland is officially an independent country.”

Iceland applied to join the EU in 2009 after the global financial crisis, but membership negotiations were suspended in 2013 when a Eurosceptic coalition government was formed.

Iceland’s Foreign Minister Torgeldur Gunnarsdóttir said earlier this year that deeper dialogue and cooperation with the EU will be a key element in strengthening the country’s interests.

“It is clear that the international system in which we have lived since the end of World War II is in disarray,” Gunnarsdóttir said in an article in Icelandic newspaper Vigir, according to Google Translate.

Bergman said that along with President Trump’s ambitions for Greenland, declining confidence in the United States as a security partner was another major concern ahead of the vote.

Iceland, a founding member of NATO, is the only ally without its own military. The country also straddles the so-called GIUK Gap, a maritime chokepoint between Greenland, Iceland and the United Kingdom that connects the North Pole and the Atlantic Ocean.

“Iceland’s security and defense are protected by its NATO membership, but more importantly for many, by its bilateral defense agreement with the United States since 1951. It now appears that many are reconsidering the validity of that defense agreement,” Bergmann said.

Although these geopolitical developments have influenced the context in which Icelanders discuss the possibility of EU membership, political experts stress that this debate is primarily driven by domestic issues, particularly the economy, sovereignty, and fisheries.

One of the arguments in favor of a yes vote concerns the Icelandic krona, a floating currency that is known to be vulnerable to sudden exchange rate fluctuations.

“The current Social Democratic-led government, which actually initiated or applied for membership in the first place, is rekindling its efforts to put an end to this unfinished business, so to speak,” Stephen Brockmans, deputy director of the Center for International Defense and Security think tank, told CNBC by phone.

Meanwhile, former Icelandic Prime Minister Katrin Jakobsdóttir said she did not understand the argument for EU membership, saying her country maintains close economic cooperation with the 27-nation bloc and its people already enjoy a high standard of living.

Jakobsdottir told CNBC in mid-April: “If a majority of the population wants to apply, it is very important to listen to that majority, but my position has not changed.”

Indeed, Iceland is already deeply integrated into the European framework through its membership in the European Economic Area, which allows the volcanic island to access the EU’s single market without requiring full membership.

Iceland is also a member of the Schengen Area, which allows passport-free travel to and from other European countries.

Political experts say the EU is in the market looking for some kind of success story, especially after Britain’s exit in 2020.

Bergmann said a victory for the Yes camp could pave the way for a negotiated agreement to be reached relatively quickly, as Iceland’s coalition government is due to hold its next general election, which must be held by August 2028 at the latest.

“In this day and age, bigger seems to be better,” Brockmans says.

He added that the EU’s potential welcoming of a country that ranks among the leading countries in terms of GDP per capita and among the leading countries in terms of democratic performance in the world would undoubtedly give “additional shine to the European integration project”.