Iceland's EU referendum hinges on fishing rights and geopolitical security

On Saturday, the people of Iceland will answer a question that has divided them for generations: whether to resume formal talks about joining the European Union. The vote arrives at a moment of genuine uncertainty. One recent poll showed the Yes side ahead 51.3% to 48.7%; another had the two camps deadlocked. Political scientists say the outcome is genuinely difficult to predict.

At a waterfront processing plant, workers in blue overalls and hairnets sort freshly caught cod and haddock, feeding machines that transform the fish into fillets destined for European markets. Pétur Pálsson, who runs Visir fishing, worries that EU membership would hollow out Iceland's fishing industry and send jobs elsewhere. "If we are in the EU, they will be the ones who make the policy," he says. This anxiety runs deep. Fish and marine industries account for nearly 40% of Iceland's total exports. Under the EU's common fisheries policy, Iceland would surrender some control over its fishing grounds—a prospect that feels, to many Icelanders, like surrendering a piece of national identity itself.

Iceland is a nation of almost 400,000 people, and it has been wrestling with the EU question for decades. But the timeline has accelerated. After winning a snap election in 2024, Prime Minister Kristrún Frostadóttir's centre-left government committed to holding a referendum by 2027. Then the world shifted. Russia's invasion of Ukraine, intensifying rivalries in the Arctic, and Donald Trump's unpredictable rhetoric about NATO and Greenland have pushed Iceland's geopolitical position to the front of the national conversation. Finance Minister Daði Már Kristófersson told the BBC that "things have been moving very rapidly with respect to geopolitical challenges," forcing the country to reckon with its place in the world sooner than planned.

Iceland sits in a strategically vital corner of the North Atlantic, adjacent to the GIUK gap—a stretch of sea where Russian maritime activity is monitored closely by Western powers. Iceland is a founding member of NATO, yet it maintains no military of its own. Its security depends entirely on NATO allies and a 1951 defence pact with the United States. In June, Icelandic authorities tracked a Russian intelligence ship passing through Iceland's Exclusive Economic Zone. Meanwhile, Trump's repeated comments about acquiring Greenland, and his apparent confusion when he mistakenly referred to Iceland four times during a speech at Davos, have unsettled officials and citizens alike. The new US ambassador later apologized for joking that Iceland could become the 52nd American state. These moments have sharpened a question: Can Iceland truly rely on its traditional security guarantor?

The Yes campaign argues that EU membership would provide economic stability and geopolitical ballast. Adopting the euro could help tame Iceland's volatile currency and its stubbornly high inflation rate, which has climbed to 8%. Prices in Iceland run 84% higher than the EU average. A 62-year-old named Adolf Fridriksson, speaking in downtown Reykjavik, pointed to the mortgage crisis facing younger Icelanders: "The biggest problem right now is for the generation who are trying to buy their own housing. The mortgage rates are terrifying." Kristófersson argues that EU membership would "strengthen Iceland's security and trade position, and shield it from much bigger powers."

The No campaign, led by opposition politician Guðrún Hafsteinsdóttir, draws its strength from fishing and sovereignty. Margrét Ágústa Sigurðardóttir, head of the Icelandic Farmers' Association, is skeptical that Iceland can negotiate a permanent exemption from EU fishing rules. "No member state has been granted a permanent opt-out," she says. She worries that EU policymakers will prioritize "the interests of 450 million consumers, rather than the specific needs of a country of 400,000 people." A 22-year-old named Helga expressed the concern plainly: "The fishing industry, and everything else, should be in our control."

The government has signaled it will seek a "special arrangement" to protect fishing and agriculture, pointing to precedents like Norway's 1994 negotiation and the special terms secured by Finland and Sweden for northern agriculture. But Eurosceptics remain unconvinced such carve-outs are achievable. Eirikur Bergmann, a professor of politics at Bifröst University, notes that fishing is so woven into Iceland's culture and political identity that no politician could ever concede control of the waters. "They'd be expelled from the country," he says.

A Yes vote on Saturday would trigger negotiations with Brussels, though any final membership deal would require a second referendum and approval from all 27 EU member states. A No vote would shelve talks for now. Some voters are expected to vote Yes precisely because this is not the final decision—they want to see what Brussels actually offers before committing. "We have to know what's in the package from the EU," said Reykjavik resident Anna Ragnarsdottir. "If we say no, we won't ever know." The result will be watched across Europe. A Yes vote would represent a win for EU enlargement; a No vote could signal that even wealthy, stable democracies are unwilling to trade sovereignty for integration. The outcome may also influence Norway, where support for EU membership is quietly growing despite the country's traditional Euroscepticism.