If Iceland joins the EU, where does that leave Norway?

A “Yes” vote could leave the EU’s other Nordic neighbour in an awkward position, putting pressure on Norway to reconsider its relationship with Brussels.

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Beyond Reykjavík and Brussels, one European capital is watching Saturday’s vote particularly closely: Oslo. Norway is arguably the non-EU country with the most at stake, especially if the “Yes” side wins.

“We must recognise that an Icelandic membership process will pose special challenges for Norway as an EEA country,” Foreign Minister Espen Barth Eide told parliament in May.

Norway’s government has so far maintained that the European Economic Area (EEA) should remain the basis of its relationship with Brussels. But the implications of an Icelandic “Yes” would be difficult to ignore.

A shrinking club

The EEA extends the EU single market to three non-EU countries: Iceland, Liechtenstein and Norway. If Iceland joins the Union, the EEA would be reduced to two members, one of them Liechtenstein, a country of just 40,000 people whose economy is closely tied to Switzerland.

In effect, the EEA would become a bilateral arrangement between the EU and Norway, leaving Norway as the only major country in the European single market without a seat at the decision-making table.

Iceland would not be the first country to move from EEA membership to full EU accession. When the agreement entered into force in 1994, it also included Austria, Finland and Sweden, all of which later joined the Union after positive referendums.

Technically, the EEA would remain in place if Iceland joined the EU. Politically, however, it would become harder to argue that the arrangement remains a meaningful alternative to full membership.

“If Iceland should become a member of the EU, the balance of power between the parties to the EEA Agreement – originally 12 countries to 7 – will become 28 to 2,” Eide said.

That imbalance explains why Norway’s government, while defending the EEA as the basis of its relationship with Brussels, cannot ignore the consequences of a “Yes” vote.

“Whatever path Iceland takes, we must work to strengthen our cooperation with the EU,” Eide added.

Iceland’s Prime Minister Kristrún Frostadóttir struck a similar note after meeting her Norwegian counterpart, Jonas Gahr Støre, in February.

“We will keep the EEA Agreement active whatever happens,” she said. “Because if a yes comes out of this referendum on our side, there is still a decision to be taken on full membership. If a no comes out of it, we need to rely on the EEA Agreement being strong and active.”

A troubled history

The EEA was the product of Norway’s complicated relationship with the European project. Norwegians have twice rejected EU membership in referendums: in 1972 and 1994.

On both occasions, Norway was the only candidate country to vote against joining, with 53.5% and 52% respectively voting “No”.

That pattern remains. A poll published earlier this month by Norwegian daily ABC Nyheter found that 49% would vote against EU membership, compared with 37% in favour.

The underlying concerns – fisheries, farming and a reluctance to trade sovereignty for a limited say in a much larger bloc – have changed little since the 1990s.

Iceland shares many of those concerns. But Saturday’s referendum is not on EU membership itself. It asks whether the government should be given a mandate to resume accession negotiations, which were suspended in 2015.

A second referendum would then decide whether voters approve any eventual deal.

That means Iceland’s negotiations will be closely watched in Oslo and could potentially weaken the position of Norway’s EU sceptics.

Hallgrimur Oddsson, director of the think tank Evrópustraumar, told Euronews that Norwegians would “follow very closely” how the negotiations develop, particularly on issues such as fisheries.

He expects pro-EU parties to use any momentum to revive the membership debate, while noting that Norway has already held two referendums on the issue.

“Their history is also different,” he said.

Iceland’s vote could provide fresh momentum, but Norway would still need to find its own reasons for joining the bloc. That would require a major national debate, for which there has so far been little appetite.

Reopening old wounds

Norway’s concerns have changed little since EU membership was last debated, and neither have the positions of the main political parties.

There has been little serious discussion about reopening the membership question, partly because politicians and voters remain wary of the divisions left by previous referendum campaigns.

In the current geopolitical climate, there is also an argument that reopening such a sensitive issue – one that has divided the country and even families in the past – is the last thing Norway needs.

When the Icelandic government formally asked parliament to hold a referendum, Trygve Slagsvold Vedum, leader of the Eurosceptic Centre Party, warned that it could reinvigorate Norway’s own pro-EU movement.

“The EU forces in Norway will paint a frightening picture of Norway outside the EU. We will see an unprecedented black painting,” Vedum said, describing opposition to EU membership as the most important issue in Norwegian politics.

By contrast, Guri Melby, leader of the pro-EU Liberal Party, said Iceland’s referendum should give fresh impetus to a debate on Norwegian membership and urged Norway to learn from Iceland’s less divisive approach.

At a parliamentary hearing in March, Conservative MP Ine Eriksen Søreide argued that conditions in Europe and the wider world had fundamentally changed. As the EU deepens its integration, she said, it will become increasingly difficult for Norway to safeguard its interests from outside the bloc.

Whichever way Iceland votes on Saturday, Norway will feel the consequences. And if Reykjavík’s path towards EU membership becomes more likely, Norwegians may find themselves forced to revisit the thorny question of their own place in Europe.

Jorge Liboreiro contributed to the reporting.