Icelanders voted by a slim majority this weekend to reject the government’s request to start accession talks with the European Union. The result percentage was a familiar one to people in the UK: 52.8% no to 47.2% yes, with voters in the capital wanting to be in the EU while rural voters did not. Brexit’s instigators felt vindicated by the result. “Congratulations to Iceland on voting to keep their independence,” posted Nigel Farage.
It was a curious pronouncement because, according to Farage’s earlier statements, Iceland does not currently have independence to keep. Iceland is in the European Economic Area along with Norway, which means they’re in the EU single market and in exchange have to follow most EU rules. They also have to pay into the EU budget – around €55 million per year (per capita higher than some EU members). But because they’re not technically an EU member, they don’t get to vote on determining the EU laws that govern them – an arrangement Farage said would be unacceptable for Britain after the 2016 Brexit referendum. “We did not vote to be part of this outdated cartel that is called the single market. We voted to be free of it,” he said, noting that having to accept the supremacy of the European Court of Justice would mean Britain is not truly free. So apparently, Britain deserves sovereignty but not Iceland.
I discussed this earlier this month in my video reacting to Tory Brexiteer Dan Hannan’s Telegraph column. It isn’t just arrogant, and it isn’t just hypocritical. It’s part of a broader lie that eurosceptics have successfully convinced the public: that the EU is not a democracy and EU laws are dictated by unelected Brussels bureaucrats. In this alternative reality, why should Icelanders care whether they’re a full EU member or not? If either way they have no say in shaping EU legislation, then they might as well stick with the EEA if it means they can be exempt from EU fisheries rules. And what we can see from this weekend’s referendum is that, in Iceland and elsewhere in the EU, most Europeans live in this alternative reality. Most Europeans do not know they they have a confederal level of democratic governance where their voice is represented. And that is a major problem for this union.
As I wrote in Chapter 13 of my book The Owned Continent, according to a 2013 study by the European Commission, only 56% of EU secondary school graduates knew that members of the European Parliament are directly elected by citizens. 49% said they had learned nothing about the EU and had no understanding of how it works.
Icelanders took a look at their options and decided they preferred their current non-voting EU status than a voting one. That means they either don’t know or don’t care that citizens of EU countries have elected representatives in the EU’s legislature that determine their laws. The ‘don’t know’ explanation can be solved with education. But the ‘don’t care’ explanation is a lot trickier to deal with. And it has troubling implications.
“Voters did not choose the EEA because it offers all the advantages of membership at no cost,” wrote Italian academic Alberto Alemanno today. “They chose it despite its democratic and economic limitations. For them, market integration without a political say remained preferable to pursuing membership.”
Surprisingly, studies have shown that Iceland would pay less on a net basis as an EU member than as a EEA member, because it would get money back. So not only are Icelanders willing to accept laws they don’t get a vote on, they’re also willing to pay extra for the privilege of not voting.
Alemanno says the lesson should be that full membership with voting rights should not be the only option presented to aspiring members, and he says this should show a path forward for the Western Balkans and Ukraine. “The EU still offers no alternative option to full membership: you either complete a long and increasingly uncertain accession process, or remain outside. Iceland demonstrates that a durable position in between is not only politically viable but also attractive, and ultimately that full membership is not the only respectable status.”
I too have been persuaded by the idea of a two-speed Europe as a way to get around the political impasse the union now finds itself in, with core members held back by reluctant peripheral ones. In hindsight I think the UK should have held a referendum on accepting the Maastricht Treaty in 1992 and, if voters chose not to be a part of the European Union confederation that treaty created, the UK could have moved forward with building a viable outer-tier European Free Trade Area (EFTA) for reluctant Northern and Eastern countries to join. I think Europe would be in a better place today if this had happened, and that we would have an EU Defence Union capable of independent military action. And I share the concerns of Mario Draghi and Emmanuel Macron that taking on Ukraine as a full member could render the EU unworkable unless there are major internal changes in how the EU works. The Iceland result, therefor, should be an opportunity to revisit whether building a real EFTA/EEA – one that isn’t just a halfway house for Norway Iceland and Switzerland – is a solution for Europe.
But at the same time, there are troubling implications for this strategy. The EEA is basically the caricature of what the Eurosceptics pretend the EU is – which is what made Farage’s characterisation of Iceland as “independent” so absurd. Iceland, Norway and Switzerland (which recreated EEA through complicated bilateral accords) are “fax democracies”. In exchange for being part of the EU single market (which for them is not a bonus but a necessity), they accept being bound by laws made by institutions in Brussels they have no voice or vote in. This wasn’t by design, it was a solution that their governments had to devise after their populations rejected joining the EU in referendums in the 1990s. They had to find a way to be part of the EU while maintaining an illusion of independence for their citizens. And their citizens have accepted that bargain, considering it preferable to the indignity of being in the EU.
Much is made of the reason for this arrangement being Iceland’s fisheries, Norway’s oil and gas and Switzerland’s banking, but this is overblown as an explanation. The Commission had already said ahead of this weekend’s referendum that, now that the UK is out of the EU, they can be more flexible on the fisheries issue than they were in previous accession negotiations with Iceland. Energy sources is not an EU competence and Norway would maintain complete sovereignty over its North Sea oil and gas were it an EU member. And you only have to point to Luxembourg to show that the idea that EU membership would destroy Switzerland’s sweetheart tax deals and banking secrecy makes no sense. This has always been about pride – three wealthy and nationalistic countries for whom national sovereignty is an obsession for various historical reasons. And they prefer to live with an illusion of sovereignty – being out of the EU on paper – than having to be coloured in blue on a map of Europe.
But that so many people are willing to throw their democratic vote away is troubling. Do we really want to extend this system to even more countries? Yes, you can say that these three countries have made the democratic choice to not have a say in shaping their own laws in repeated referendums, so fair enough. But are they really doing so with all the information on hand? Do we really think that all the Icelanders voting in this weekend’s referendum knew the extent to which they don’t get a vote in their own laws now, and how they would if they became a member state? Is this a democratic choice, or a manipulation by vested interests who spread misinformation ahead of the vote, as Morning Post Europe argues today?
There’s even more ick factor when looking at the countries for which this would not be a choice but rather something forced upon them. There is no doubt that the Western Balkans, Ukraine and Moldova want to be full EU members. If they end up in the EEA, it will be because the EU told them it’s the only option – because we don’t want to introduce new opportunities to veto EU action or we don’t want new poor regions to subsidise, or new corruption to deal with. So the solution is to effectively make them non-self-governing territories of the EU?
Alemanno argues that an expanded and normalised EEA should have some kind of formalised role in the legislative process. That may be the solution. But then at a certain point, don’t you have to ask what the point of being a full member is?
None of these questions are easy. The core problem is that Europe is pulling in several different directions and national capitals are not willing to do what they know needs to be done to make Europe a sovereign and strong actor in the world. And what the Iceland vote shows us is that citizens are still not ready yet either. They either don’t know or don’t care about the risks facing them from a newly aggressive United States and the potential for a strong EU to protect them. And that is not just an Iceland problem.
Iceland would not gain much influence due to its tiny population, and it does have more independence in the EEA rather than the EU. It is obvious why Montenegro or Albania would want to join the EU. The same does not apply to its wealthier neighbors.