What you can pick up in Iceland

David Rennie

13 September 2006

British Eurosceptics would love us to leave the EU and join Iceland in Efta. But, David Rennie reports, it is not clear that we would be welcome

Before British fishermen can trawl for British fish, UK ministers have to stay up all night pleading with foreign colleagues in the airless backrooms of Brussels. Outside the Common Fisheries Policy, Iceland can take a different approach. When its seas are trespassed by foreign trawlers, Iceland has, in its day, sent out coastguard cutters with names like Thor to cut their nets, then ram them.

And here, at this stirring point, is where pro-withdrawal British Eurosceptics usually leave things. Go for a similar deal to Iceland’s, is their conclusion, and grab back our freedom. But there is a serious — and previously unreported hitch — to this plan.

The canny men who run Iceland, robust Eurosceptics all, do not actually believe that Britain could replicate their happy arrangements. They go further. They think that from the perspective of Iceland’s self-interest, a British attempt to join the cosy Efta club could be positively dangerous, like allowing an elephant into a rowing boat.

To explain why, Icelandic leaders offer a slice of history. In a nice irony, Iceland’s freedom is all thanks to Jacques Delors, and his ploy of luring Efta nations into the EU: the European Economic Area. The EEA was a honey-trap, intended to bind the Efta nations to the single market, so joining the EU would seem a logical step.

When the EEA was established in 1994 there were seven Efta nations: Iceland, Switzerland, Norway, Liechtenstein, Finland, Sweden and Austria. Switzerland refused to join the EEA, preferring bilateral deals with Brussels. But the other six did join (there are technically 28 nations in the EEA at present, as all EU member states are automatically members).

The Delors plan worked well. Before long, Sweden, Finland and Austria were all full members of the European Union. In contrast, Iceland, Norway and Liechtenstein took the honey but avoided the trap, never joining the EU.

Iceland’s most celebrated Eurosceptic, David Oddsson, does not conceal his satisfaction in an interview at the nation’s central bank, where he is chairman. Mr Oddsson — a wild-haired Thatcherite, who turned Iceland from statist backwater to free-trade powerhouse during his 13 years as prime minister — has thanked Jacques Delors in person, he grins.

If it were not for Delors and the EEA, Iceland’s anti-EU camp would never have prevailed, he explains. ‘The pressure from business to be members of the internal market would have been such that we would have lost that battle.’