Bridgehead to the Arctic

Dollar or Euro

Iceland's new EU membership debate is a direct consequence of last autumn's financial collapse. The Icelandic currency - the Krone - crashed and should "be scrapped, according to the predominating opinion," reports the German Institute for International and Security Affairs (SWP).[1] "The introduction of either the dollar or the Norwegian Krone is Under consideration," or as an alternative, a rapid membership to the Euro zone. Even before the onset of the international financial and economic crisis, sectors of the establishment were pondering "whether integration into the Euro zone would be possible without having to become a full EU member," explains SWP. But the EU does not accept this. In the aftermath of the state financial collapse, the Icelandic crisis has now reached such proportions that a majority of this country's overwhelmingly EU skeptical population is at least in favor of initiating membership negotiations - for the sake of introducing the Euro. During the election campaign, the newly elected social democratic prime minister had declared that she would like to initiate talks with Brussels in June, at the latest. She won the April elections with a clear margin.

Loss of Sovereignty

The negotiations could reach agreements on a number of issues, for example Iceland is already not only a member of the European Economic Area (EEA), it has also joined the Schengen Agreement realm and therefore is already applying pivotal EU legal norms. Still the SWP cautions against a membership euphoria. The think-tank writes that, above all, serious dissention can be expected over fishing. The fishing and fish processing industry are considered the overriding basis of the Icelandic economy. Reykjavik is not going to relinquish its control, supposes the SWP, whereas the EU will insist on "communalizing the nation's territorial waters." Berlin's government advisors see absolutely no "possibility of compromise" on the question of the "self-management of the national fishing grounds." Therefore a break-down in negotiations is not to be excluded.[2]

Power, Millions and Media

The SWP, in any case, sees also problems coming with the referendum, which is mandatory for Iceland to join the EU. Not only the political establishment in Reykjavik is "more Euro-skeptic" than "any of the other Nordic countries," according to the think-tank, but also the population. Similar referenda in other countries have shown that usually "public opinion becomes more critical, as the conditions of membership become more concrete and the focus of political debates." Of course "this trend in opinion could again change to the advantage of the EU," but "from experience, this would require a concerted effort of the political elite with 'power, millions and media,' as one Norwegian EU opponent once put it," writes SWP.[3]

Great Game

Still, the government advisors are calling for Berlin's supporting Reykjavik's bid to become a member. The country's economic resources, with its population of less than 300,000, are limited. But if an agreement on fishing is unexpectedly reached, the SWP speculates, Iceland could "bring also the last Nordic nation into the EU," meaning Norway.[4] Earlier efforts to integrate Norway into the EU were also thwarted on the question of fishing. Above all, Iceland would be a "strategic bridgehead to the Arctic realm, which is growing in significance for the EU" the advisors explain. Because the icecap is receding, due to climate change, the North Pole's voluminous amounts of mineral deposits could be profitably exploited over the next few decades, and new maritime trade routes opened through the Arctic Ocean. (german-foreign-policy.com reported.[5]) Observers see the possibility "of a new 'Great Game' developing in the Arctic."[6] "That kind of geopolitical competition could lead to a progressive militarization of the Arctic."

EU Rather Than USA

In this case, Iceland, the "strategic bridgehead," would have great significance. This island-nation, bordering directly on the Arctic Ocean, does not have its own armed forces. But it is a founding member of NATO and is bound to a defense treaty with the United States, which, until 2006, had maintained a military base in Keflavik (near Reykjavik). This provided Washington the possibility of controlling the Atlantic, half-way to its erstwhile system opponent, the Soviet Union. The base, having lost its importance, has been abandoned for more than two and a half years. Serving as a "bridgehead" to the Arctic provides Iceland a new geo-strategic importance for future conflicts. The EU should take advantage, says the SWP.

Special Relations

SWP predicts, that the German government's vigorous support for Iceland's attempt to join the EU, places Berlin in a long-term advantageous position - even if Iceland decides against the membership. The advisors remind that also Norway, in spite of intensive German lobbying, decided twice not to become a member. Yet the German government's engagement paid off. SWP notes with satisfaction that "today, Germany has an excellent partnership of strategic importance with Norway, in spite of the latter's special status at the outskirts of the EU."[7]

[1], [2], [3], [4] Carsten Schymik: Island auf EU-Kurs; SWP-Aktuell 24, Mai 2009
[5] see also Ice Cold War and Cold War at the North Pole
[6] Wettlauf um die Arktis: Empfehlungen an die EU; www.boell.de 25.03.2009
[7] Carsten Schymik: Island auf EU-Kurs; SWP-Aktuell 24, Mai 2009