What you can pick up in Iceland

16 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

UK leaders could try toughing it out, and demanding a good deal. But access to the single market is a financial prize, and the EU has shown itself ruthless in charging for it when countries bigger than Iceland come asking. Norway, a giant among the other Efta tiddlers, already pays nearly as much as it would if it became an EU member, Oddsson says.

Switzerland, for all its bilateral deals, recently found itself ordered to levy a special tax on the savings of EU citizens in Swiss banks — and to send much of the proceeds to Brussels. Brussels has just ‘invited’ the Swiss to stump up extra funding for the ten new member states that joined the EU a couple of years ago: a cool £435 million over five years. The Efta–EEA trio, for their part, have agreed to cough up an extra £805 million for the same newcomers over the same period, with Norway paying the lion’s share.

Back in his top-floor office, with its sweeping views of the lunar plains outside Reykjavik, Oddsson believes that Britain will never be excused a penny of its current dues to Brussels, even out of the EU. ‘The other big players are not very happy with what the UK pays already. The pressure from the big players would be, “The UK is paying less than they should, this or that amount was handbagged from us by Mrs Thatcher.”

‘I think it would be very difficult for anyone to leave the Union and pay less — even if that were fair. Because the EU is not fair,’ says Oddsson, with a grim laugh.

Withdrawal from the EU is not impossible, of course. The ‘join-Efta’ argument is not a wholly false prospectus. But when you hear that it might not save us any money, and might even wreck the whole EEA deal, the argument suddenly sounds a lot like false comfort.

David Rennie is contributing editor of The Spectator and Europe correspondent of the Daily Telegraph.