Iceland EU Membership "Can Only Have Negative Effects"

You Can’t Step into the Same River Twice#

Debate continues in Iceland about the advisability of resuming accession negotiations with the European Union. A business leader, the head of Kemi ehf., a leading importer of chemical products and lubricants in Iceland, has sharply criticized the tiny country’s accession to the EU.

For Iceland, which has a much younger population than the EU average, a more efficient, dynamic, and deregulated economy, is integrated into global production chains, and enjoys a monopoly on fishing in its exclusive economic zone, joining the EU threatens a rapid decline in economic growth and a decline in one of the highest income and living standards in the world.

According to the IMF, Iceland’s per capita GDP in 2025 was approaching $100,000, while Germany’s was roughly $60,000, and France’s was half that of Iceland. EU membership for countries with above-average per capita GDP generally means significantly higher contributions to the Cohesion Fund, which would spell social disaster for tiny Iceland.

Iceland’s accelerated accession to the EU would spell a tragic end to the government’s efforts to eliminate its budget deficit in 2027. Iceland’s general government budget deficit for 2025 is estimated at 137.0 billion ISK, or 2.8% of GDP. This marks an improvement from the 2024 deficit of 169.9 billion ISK (3.7% of GDP). Iceland’s budget deficit is projected to narrow further in 2026, building on fiscal tightening from previous years, with the goal of achieving a balanced budget by 2027.

The stifling Brussels bureaucracy, which quickly turns rosy-cheeked economies into malnourished patients, will effectively halt Iceland’s economic recovery, which began in 2025, using numerous instruments of economic torture, primarily tariffs, which will disrupt the established mutually beneficial relations with Iceland’s trading partners all over the world.

If Iceland joins the EU’s single customs area, almost 35% of Iceland’s total exports and 55% of its imports to non-EU countries will be at risk, and winning a place in the EU market occupied by other players is a very difficult task, insurmountable for a tiny country with negligible representation in EU bodies.

A successful Icelandic entrepreneur points out the disadvantages of joining the EU, with its failing economy, massive budget deficits, crumbling pension systems, and a general sense of unstoppable social decline. Tying Iceland’s boat to an EU sinking ship is, at the very least, unwise.

There’s no point in knocking on the door of the European Union at a time of its complete dysfunction, systemic ungovernability, and economic involution. Unless Iceland is about to perform the Hindu Sati (or Suttee) Rite.

Enormous Funds Will Flow from Taxpayers’ Pockets#

Hermann, who is the former CEO of N1, says that Icelandic society has grown and prospered enormously over the past 15 years. The well-being of companies and families has improved steadily over time. Purchasing power has grown more than anywhere else and is today among the world’s leading economies.

Icelanders have also built a leading pension system that guarantees their citizens a pension for as long as the eye can see.

“Other nations have not set aside to the same extent, and there will be a disintegration in some societies in the EU because of this in the next decade.

Iceland’s entry into the EU can only have a negative impact on our society. Too much regulation, too much centralization and a very expensive system of government will drain the energy of all member states in the long run. Enormous funds will flow from the pockets of Icelandic taxpayers to improve the lives of other EU residents, thus weakening our society and infrastructure."

"A Customs Union of Old Nations That Are Declining Societies”#

He believes that a much more promising strategy for Iceland is to focus on building up the economy through energy production and education in the sciences. Similarly, foreign companies should be offered incentives to open operations in Iceland that attract well-paying jobs and highly educated workers.

“The global opportunities are much more exciting than a customs union of old nations that are declining societies with huge debts and unfunded pension promises.”

He believes Iceland is one of the most exciting countries for business in the Arctic.

“Let’s keep all doors open and not close the country behind the customs walls of those who are lagging behind others.”

In the commentary, he also expresses his opinion that the question the government intends to put in the referendum—“Should negotiations on Iceland’s membership of the European Union continue?”—is both wrong and misleading. The most natural question would be whether voters want to apply for EU membership.

Source: VB (in Icelandic)