EU membership not the answer for Iceland, opposition leader says

COPENHAGEN, June 24 - Iceland's main opposition leader said European Union membership would not fix the country's economic problems or strengthen its security, making the case for a "no" vote ahead of a referendum on whether to reopen accession talks.

Gudrun Hafsteinsdottir, chair of the Independence Party, Iceland's largest opposition party, told Reuters on Tuesday that Iceland's security rested on NATO and its bilateral defence agreement with the United States.

She said Iceland should work closely with the EU on sanctions, energy security and foreign policy, but that membership was not the answer.

"The EU is not a substitute for NATO, and EU membership is not a magic shield against geopolitical risk," Hafsteinsdottir said in an interview.

The August 29 ballot is not a vote on membership itself and any deal would require a second referendum. Reykjavik abandoned previous negotiations in 2013 when a eurosceptic government took power.

A recent poll showed that 44.5% of Icelanders plan to vote "yes" to reopening talks, with 39.4% opposed and 14.6% undecided. A majority oppose actual EU membership.

The Arctic nation's Finance Minister Dadi Mar Kristofersson, who recommends a "yes" in the vote, told Reuters last week that EU membership had become vital for Iceland to shield itself from great power coercion and tackle some of the world's highest cost of living.

U.S. President Donald Trump's threats to acquire Greenland, Iceland's Arctic neighbour, triggered one of the sharpest transatlantic confrontations in years, prompting Kristofersson to say the geopolitical situation had changed to a certain extent.

Asked whether Trump's threats had changed her thinking on EU membership, Hafsteinsdottir said: "No, I don't think so."

On the economy, she said Iceland's high cost of living reflected structural problems that EU membership could not fix.

Iceland is a small, remote market with little competition in sectors such as food and housing, and the economy has been struggling with years of high inflation and interest rates following the COVID-19 outbreak.

Fisheries, along with tourism and aluminium, is one of the pillars of Iceland's economy and national identity, and the industry fears that joining the EU's Common Fisheries Policy could mean opening Icelandic waters to foreign fleets.

"Fisheries is in our DNA like a part of our independence. It's just totally unacceptable that we will share the fisheries with other countries. We will never accept that," Hafsteinsdottir said. REUTERS