Icelanders go to polls in EU membership talks referendum

Voters in Iceland are taking part in a referendum on whether or not to revive membership talks with the European Union, more than a decade after they were frozen. The coalition government brought forward the referendum following US President Donald Trump's threat to seize nearby Greenland. Polling stations opened at 9am local time and will close at 10pm, with the first indications expected before midnight. The campaign has been incredibly tight, with tiny margins for both the 'No' and 'Yes' camps. The latest Gallup poll put the No side ahead with 51.6% of the vote. A separate poll earlier this week put the 'Yes' side in front with 51.3%. The referendum is about whether Iceland should unfreeze accession talks that a former Eurosceptic coalition unilaterally ended in 2015. Read more: Fishing dominates as Iceland prepares to cast vote on EU referendum While Mr Trump’s designs on Greenland have given the referendum intense geopolitical focus, the campaign has been dominated by domestic issues. The 'Yes' campaign says that Iceland has much stronger leverage compared to the last time, and will be in a better position to negotiate an accession agreement that will protect its cherished fishing industry. The No side has largely dismissed the threats by Mr Trump and argues that, since Iceland is already in NATO and participates in the EU’s single market, there is no point in the island embarking on a process that could lead to a potentially divisive second referendum. "I think Iceland is better off outside of the EU," former Prime Minister Katrin Jakobsdottir told journalists after speaking at a 'No' campaign event in Reykjavik on Thursday. "For a country like ours with our small economy, it's very important to maintain our sovereignty and not to transfer more power than we would have to do to the EU." Iceland first applied to join the EU in 2009, in the depths of a financial crisis that hit the country's small, exposed economy especially hard. Talks ended in 2013 when a Eurosceptic government shelved the process. Renewed geopolitical turmoil has brought fresh urgency to an issue Icelanders have debated on and off for decades. Foreign Minister Thorgerdur Gunnarsdottir, who has been backing 'Yes', told Reuters last week that today's vote comes down to a simple question: can Iceland still afford to stand apart in a world where old certainties are crumbling? "The international order that underpinned our security and prosperity for decades is under serious pressure," she said. "In times like these, small nations need to think carefully about where they stand and who stands with them." Interest rates and cost of living Debates inside Iceland have focused more on interest rates, fishing rights and the cost of living than on security. Iceland has grappled with persistently high inflation and rates that made mortgages punishingly expensive, and supporters of a 'Yes' vote say EU membership, and possibly adoption of the euro, could offer some relief. Iceland's central bank rate stands at 8.00%, against 2.25% at the European Central Bank. "It would not solve Iceland's structural faults, but it could become a catalyst to a more healthy economy," said Vilhjalmur Hilmarsson, chief economist at Viska, one of Iceland's largest labour unions. Opposition leader Gudrun Hafsteinsdottir, who has led the 'No' campaign, has argued the economic case is overstated. "These are not problems that Brussels will solve for us. These are problems that Icelandic politicians must solve," she said. Fisheries as the sticking point Under EU rules, fishing quotas are based on historical fishing patterns among other things. Some officials argue that would let Iceland keep control of its waters, since no EU country has fished there for decades. Opponents are not convinced. "I know that the European Union will come up with some promises of some flexibility, especially in the beginning, but we know that it will not be for good," Mr Hafsteinsdottir said. A foreign ministry memo estimates accession talks could start by the end of 2026 and take 18 to 24 months, if today's vote favours reopening negotiations. Iceland must also hold a general election by November 2028, adding a further layer of political uncertainty to any negotiating timetable that stretches into that period. Additional reporting Reuters