An evolving EU engaging a changing Mediterranean region Jean Monnet Occasional Paper 01/2013 Iceland’s contested European Policy: The Footprint of the Past - A Small and Insular Society by Baldur Thorhallsson Copyright © 2013, Baldur Thorhallsson, University of Malta ISSN 2307-3950 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means – electronic, mechanical, photocopying, recording or otherwise – without any prior written permission from the Institute for European Studies, University of Malta. Publisher: Institute for European Studies, Msida, Malta. The Institute for European Studies The Institute for European Studies is a multi-disciplinary teaching and research Institute at the University of Malta, offering courses in European Studies which fully conform to the Bologna guidelines, including an evening diploma, a bachelor’s degree, a masters and a Ph.D. The Institute also operates a number of Erasmus agreements for staff and student exchanges. Founded in 1992 as the European Documentation and Research Centre (EDRC), the Institute was granted the status of a Jean Monnet Centre of Excellence in 2004. The Institute is engaged in various research and publication activities in European Integration Studies and is a member of the Trans-European Policy Studies Association (TEPSA), the LISBOAN network, EPERN, EADI, and the two Euro-Mediterranean networks, EuroMeSCo and FEMISE. The Institute is also a member of the Council for European Studies (hosted at Columbia University). 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Citation Baldur Thorhallsson (2013). ‘Iceland’s contested European Policy: The Footprint of the Past - A Small and Insular Society’, Jean Monnet Occasional Papers, No. 1, Institute for European Studies (Malta). ADVISORY BOARD Chair: Prof Roderick Pace Prof Fulvio Attina Professor of International Relations and Jean Monnet Chair Ad Personam, Dipartimento di Scienze Politiche e Sociali, Università di Catania, Italy Prof Stephen Calleya Director, Professor of International Relations, Mediterranean Academy of Diplomatic Studies, Malta Dr Marcello Carammia Lecturer, Institute for European Studies, University of Malta Prof Laura C. Ferreira-Pereira Associate Professor of Political Science and International Relations, School of Social and Political Sciences, Technical University of Lisbon, Portugal Prof Aylin Güney Associate Professor and Jean Monnet Chair, Department of International Relations, Yaşar University, Izmir, Turkey Dr Mark Harwood Lecturer, Institute for European Studies, University of Malta Prof Magnús Árni Magnússon Associate Professor, Bifröst University, Iceland Dr Michelle Pace Reader in Politics and International Studies, Department of Political Science and International Studies (POLSIS), University of Birmingham Dr Stelios Stavridis ARAID Researcher University of Zaragoza, Spain Dr Susanne Thede Senior Lecturer, Institute for European Studies, University of Malta Prof Baldur Thorhallsson Professor of Political Science and Jean Monnet Chair in European Studies at the Faculty of Political Science at the University of Iceland The JM Occasional Papers do not necessarily reflect the views of the Institute for European Studies but those of the author. This project has been funded with the support from the European Commission. This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of the information contained therein. Grant no. 2012- 2690. Table of Contents From settlement to republic: Maintaining close ties with other countries in the North 5 The changed party system: The dominance of the centre-right swept aside 6 Iceland’s uniqueness in the North 7 Iceland’s foreign policy: A quest for self-determination and direct economic gains 9 The Cod Wars 10 Iceland’s closest ally - no longer present 10 Partial engagement in the European project 13 Smallness of the central bureaucracy 16 Conclusion 17 Bibliography 18 exceptions. On the other hand, the country has Iceland’s come under American influence – geographically, it straddles the Mid-Atlantic contested rift – and has limited its participation in the European project. Its geographical location in European Policy: the middle of the North Atlantic has led to a The Footprint of notion that the country’s culture is unique and should be protected by all available means. the Past - A Politicians continue to play the ‘nationalistic uniqueness’ card with considerable success Small and even though the country has been swept by globalization. Rapid modernization (which Insular Society only really began in the Second World War with British and American occupations) and Iceland’s domestic politics and foreign affairs sudden engagement with the outside world are undergoing drastic changes. After an (which only extended to the general public in economic crash, violent protests on the streets the last quarter of the twentieth century) are of Reykjavik for the first time in Iceland’s still slowly but steadily making their mark on history contributed to the defeat of the the country’s foreign policy. The country’s government. The party system has been political discourse and foreign policy still bear altered. A turn has been taken towards Europe the hallmark of the past, i.e. of a small and after the United States left the island, first by insular society closing its military base in 2006 and then by its clear stance not to assist the country in its This paper will address the political economic difficulties. The former close developments in Iceland since the 2008 relations with the superpower are unlikely ever economic crash and place it in a historical to be restored. The EU membership application context. The aim is to understand Iceland’s is placing severe constraints on political parties present foreign policy and, in particular, the which are split on the issue and has put in highly contested decision by its government in jeopardy the unity of the first left majority in 2009 to apply for membership of the European the Icelandic parliament, the Althingi. Society Union. The paper is divided into five sections is in a state of flux after an unprecedented in addition to this introduction and the economic downscaling and the collapse of concluding remarks. First, it starts by almost its entire financial sector – which had explaining the importance in Iceland of a boomed rapidly beginning in the mid-1990s. political discourse based on the concept of The credibility of politicians, the parliament independence which dates back to the and the media is in ruins. historical narrative of the settlement period. This section will also examine Iceland’s close Iceland’s smallness and its location on the relations with the other Nordic states – despite geographical map – one could also say the important differences between it and the geopolitical map – has had a profound others. Second, the paper will analyse the influence on its domestic and foreign affairs. importance of the party system, i.e. the Iceland is closely associated with the other dominance of the centre-right in Icelandic Nordic states and has adopted many of their politics, and the changed nature of the system. domestic characteristics, with important 4 Third, it examines how Iceland further Norwegian rulers ever since the settlement. A distinguishes itself from the other Nordic states century later, the Norwegian kingdom was in many important features. Fourthly, the paper united with the Danish one under the Kalmar analyses the country’s three main foreign Union. It also included Sweden and the islands policy priorities in the post-war period, i.e. mentioned above and lasted until the first extensions of the Exclusive Economic Zone, quarter of the 16th century. Iceland’s union firm defence arrangements with the US and with Denmark lasted until 1944. membership of NATO, and the drive for better market access for marine products – including Icelandic governments have always a partial engagement in the European project. emphasised a close relationship with the Fifthly, the paper examines how the country’s country’s neighbouring states and its most smallness, in terms of its central administrative important trading partners. Its closest contacts capacity, has affected its domestic and foreign have been with the other Nordic states, policy-making. The concluding section particularly Denmark, as well as Britain and summarizes the main findings concerning the the US. Iceland became a sovereign state in political and historical obstacles that the Social 1918 and was in full charge of its foreign Democratic Alliance