The first shock of the 2008 economic crisis encouraged Iceland to apply for EU membership, but its social effects and local political dispute appears to be turning the tide towards a rejection in a national referendum. The social effects of the crisis appear to manifest themselves in fear and distrust of local individuals and organizations and heightened sense of nationalism with bunker mentality towards foreign influence.
Having been hit by the worst economic crisis in modern times, Iceland applied for full European Union membership in 2009. As a member of the European Economic Area since 1994, Icelandic society had undergone radical changes towards modernity through the subsequent effects of globalization and a policies with a libertarian emphasis on a free market economy. But a corrupt political elite privatized many of the state‘s institutions around the turn of the century, including banks which were sold to individuals with little experience in banking but close ties to the coalition parties in government. The three major banks all went under in the span of less than a week in October 2008.
The parliament elections of 2009 saw the ousting of the dominant right wing libertarian party, the Independence Party and a first ever clear majority for a leftist coalition between the Social Democrats and the Left Greens. Having recieved most of the popular votes and running on a mandate of applying for EU membership, the Social Democrats formed a government with the Eurosceptic Left Greens with an application as a high priority. Icelanders for EU membership claim that it offers an economic and defensive shelter for the small nation through the European Central Bank, the Euro and the ESDP and that Iceland‘s place in a globalized world is within Europe. Those against membership claim loss of sovereignty and independence, as well as strong resentment against the union itself, arguing that Iceland‘s future is best assured outside it or through bi-lateral agreements with nations from Canada and the USA to even India and China, even proposing unilateral adoption of their currencies.
Following an economic crisis where the nation‘s wealth is being redistributed, interest groups in society are fighting for power. Budget cuts, higher taxes and a prolongued debate with the UK and the Netherlands over the IceSave agreement have enabled opposition politicians and various demagogues to use nationalistic rhetoric to bitterly divide the nation on matters where it must be united.
Thus the economic crisis has spawned a social one which will shape Iceland‘s destiny in the 21st century, which could prolong the economic crisis locally and globally it could perhaps mean the stalling of further EU enlargement to the west.
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Stephen Christian
7 months ago
Is the EU really a shelter, though? Sure they have bailed-out Greece, but at what cost? Much of Greece’s social services will be dismantled and its public resources sold to the lowest bidder — at worse terms than even the Icelandic crony deals. They plan to sell off parts of their gambling, banks, ports, water, airports, motorways, electricity. Basically everything. That sounds more like a robbery than a rescue to me. Iceland better be DAMN sure it is not jumping from the frying pan into the fire.
Dadi
7 months ago
Stephen, after much debate it is now quite hard to find credible commentators on Greece and the other PIGS who lay the blame for their situation on them being members of the EU.
Greeks, like Icelanders do themselves no favors in pointing fingers away from their own troubles. What the nations appear to have in common are a corrupt, nepotistic society where local business and political elites have parasitically sucked away their country´s wealth.
Any EU plan, like the IMF plan in Iceland is designed to get the patient off the drugs. It requires tough measures for sure. But the Greeks can hardly complain about their creditors if they are not willing to change. Just like Icelanders can hardly complain about the result of the Independence Party policies of 1991-2008 if they keep wanting the same. It remains to be seen whether
But as far as the “shelter” question goes. There is great misunderstanding about how EU membership can offer shelter and it concentrates too narrowly on purely economic and security issues. Iceland has traditionally been a hesitant participant in international cooperation due to nationalistic ideology being dominant in the social discourse. Becoming a participant in such organization as the EU can possibly offer a type of shelter by changing the local ideology from reclusive, hesitant, distrusting, xenophobic selfishness towards openness, cooperation and sense of responsibility as a part of a whole.
Dogmas are dominant in public discourse but they are growing quite tired. The EU is not perfect, but its whole existence has come about to counter shocks, war, poverty and instability. That is the big picture, not a narrow view.
Lino
6 months ago
Dadi,
you’re an idealist: the EU is no benefactor, it will give and it will want things in exchange. The only thing you can do is working out (not easy) if the plus better the minus.
EU membership will not make necessarily nations more open/”smarter”: just look at Greece/Ireland/Portugal
Lino
6 months ago
>Sure they have bailed-out Greece, but at what cost?
wow, don’t forget the cost to the other Euro memebers that have to foot the greek bill.
As for the cost, the greek should not complain: for decades they’ve lived beyond their means (I will not use the argument lazy/corrupt, it would not change anything) using debt. Well time is up, game over.
>Much of Greece’s social services will be dismantled and its public resources sold to the lowest bidder
so what? Time to pay the debts and deleverage. Debt is not wealth and social services are a “right” only if you can afford them. Like eating, that goes for individuals as for whole nations.
Dadi
6 months ago
Lino; when I talk of international cooperation I am under no illusion that it requires something from both sides. The benefits are very assymetric to say the least though, Iceland definitely has more to gain from joining the EU than the EU has from Iceland joining.
Lino
6 months ago
“cooperation” is a misnomer.
It’s not just asimmetricy of gains but of bargaining positions as well, simple brute force power ratio: you negotiate when in strong or at least not markedly inferior conditions otherwise you have to accept whatever you’re offered.
I keep thinking that icelanders do not understand AT ALL what they are getting into when applying halfheartedly to the EU and they’re doing at the wrong time for the wrong reasons