Why Iceland’s EU referendum could reopen Norway’s Europe debate

For decades, Norway has been politically comfortable outside the European Union while remaining deeply integrated with Europe through the European Economic Area (EEA) agreement.

But that balance could be challenged if Iceland takes a different path.

According to Jonas Stein, a political scientist at UiT The Arctic University of Norway, Iceland’s upcoming referendum on restarting EU negotiations could revive a debate in Norway that has largely been dormant since the country’s last EU referendum in 1994.

Iceland plans to hold a referendum on 29 August asking voters whether the government should resume negotiations on joining the European Union. If voters approve restarting talks, any eventual membership agreement would later be put to a second referendum.

Recent polling suggests a majority of Icelanders support reopening negotiations, with roughly 57 percent in favour and around 30 percent opposed.

Iceland’s foreign minister Þorgerður Katrín Gunnarsdóttir has also suggested negotiations could move relatively quickly if talks restart. Because Iceland already participates in much of the EU framework through the EEA agreement and the Schengen Area, many policy areas are already aligned with EU rules.

According to the minister, negotiations could potentially be completed within about a year and a half, although politically sensitive issues such as fisheries would likely remain central.

The ‘unbearable lightness’ of the EEA

Iceland and Norway have long occupied a similar position in Europe: closely integrated with the European Union without actually joining it.

Both countries participate in the EU’s internal market through the EEA agreement, which gives them access to the single market while allowing them to remain outside the Union. In practice, this means adopting large parts of EU legislation affecting trade, regulation and mobility, despite not having voting rights in EU institutions.

For many years, this arrangement has been politically stable in both countries.

“The EEA agreement works extremely well for Norway,” Stein said. “It works for business, it works for students and it works for citizens.”

Public support for the arrangement remains strong in Norway. According to Stein, roughly three quarters of Norwegians support the EEA, while backing for full EU membership remains significantly lower.

“Support for joining the EU is probably around 30 percent,” he said. “Around 40 to 45 percent are opposed, and a significant share remain undecided.”

Opposition to EU membership in Norway has often centred on concerns about national sovereignty and control over natural resources, particularly fisheries, agriculture and energy. Similar arguments have shaped the debate in Iceland, where critics of EU membership have long warned that joining the bloc could weaken national control over the country’s fishing grounds.

The arrangement comes with a clear trade-off: Iceland and Norway benefit from access to the EU’s single market while adopting many EU rules without participating in the political institutions where those rules are decided.

Stein describes this paradox as “the unbearable lightness of the EEA agreement.”

“It works so well that people accept the democratic deficit,” he said.

Why Iceland’s decision matters in Norway

That is why Iceland’s referendum could have wider political implications in Norway.

“Iceland and Norway see themselves as very similar countries,” Stein said. “Small Nordic states on the periphery of Europe.”

Because both countries have relied on the same EEA-based model of integration, a decision by Iceland to move toward EU membership could challenge the political stability of Norway’s current arrangement.

“If Iceland joins the EU, Norway would suddenly be much more alone outside the Union,” Stein said.

“That would strengthen the pro-EU side in Norway.”

While EU membership has not been a dominant political issue in Norway in recent years, Stein believes developments in Iceland could make the question more visible again.

What would become of EFTA?

An Icelandic move toward EU membership could also affect the structure of the European Free Trade Association (EFTA), which currently includes Iceland, Norway, Liechtenstein and Switzerland.

Within the EEA framework, however, Norway already plays a dominant role.

“Norway pays roughly 97 or 98 percent of the costs connected to the EEA system,” Stein said.

If Iceland were to join the EU, the EEA’s EFTA pillar would effectively consist of Norway and Liechtenstein, an arrangement that would look increasingly unusual.

“Technically it could survive,” Stein said. “But politically it would look even more artificial.”

For now, Norway remains largely comfortable with its current relationship with Europe — closely integrated with the EU but outside the Union itself.

But Stein says Iceland’s referendum will be closely watched across the Nordic region.

Whether Iceland ultimately decides to pursue EU membership or maintain its current arrangement, the outcome could shape how Norway and other non-EU countries think about their own relationship with Europe.

“Iceland and Norway have followed very similar paths in Europe,” Stein said. “If Iceland changes course, that will inevitably raise questions in Norway as well.”