Iceland to hold 'Brexit-style' referendum as voters warned joining EU is 'worst business idea'

Iceland will hold a referendum on August 29 to determine whether the Nordic nation should resume negotiations to join the European Union, marking the first such vote in over a decade.

The ballot, which has drawn comparisons to 2016's Brexit referendum in the UK, arrives at a moment of heightened geopolitical anxiety and economic strain for the approximately 400,000 residents.

Opponents of EU membership have already begun mobilising, warning that closer ties with Brussels would represent a grave mistake for Icelandic sovereignty and prosperity.

The outcome could reshape the country's relationship with Europe after years of maintaining distance from full membership while participating in the bloc's single market through the European Economic Area.

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Professor Haraldur Ólafsson, who heads the campaign against EU membership, has issued stark warnings about the economic consequences of joining the bloc.

"I would suggest that becoming a member of the European Union is the worst business idea Iceland could think of, and being a member is a huge step away from democracy as we know it," he told The Telegraph.

His campaign has adopted the slogan "Keep In Control", drawing direct inspiration from the Vote Leave movement's famous "Take Back Control" message during the Brexit campaign.

Professor Ólafsson argues that Icelanders would come to regret such a decision, pointing out that the country already adheres to EU regulations through its single market participation while retaining independent control over trade and fishing policy.

The professor also pointed to Britain's departure from the EU as a cautionary example for Icelandic voters considering membership.

"The conclusions we can draw from Brexit are that you are not supposed to leave the EU," Mr Ólafsson said, suggesting that the block makes exit deliberately arduous for member states.

He warned that the situation would become even more complicated should Iceland adopt the common currency.

"They would make it as and if we had the euro, it would go from being difficult to being impossible," he added.

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The argument presents a paradox for Icelandic voters: while the "no" campaign draws rhetorical inspiration from Brexit, it simultaneously uses Britain's troubled departure as evidence that EU membership represents a one-way door that nations cannot easily reverse.

Iceland's reluctance to pursue EU membership has historically centred on fears that accession would force the nation to open its abundant North Atlantic fishing waters to vessels from other European countries.

The country submitted an application in 2009 following the catastrophic collapse of its banking sector during the global financial crisis, but negotiations were halted in 2013 when a centre-right administration took office and formally abandoned in 2015.

Prime Minister Kristrun Frostadottir's centre-left coalition, which came to power in 2024, had initially planned a referendum by 2027 but brought the date forward after President Trump made threats regarding neighbouring Greenland, at times confusing the two territories during the diplomatic row.

Escalating living costs, the ongoing conflict in Ukraine, and transatlantic tensions have intensified concerns about Iceland's security, particularly given the nation lacks a standing army and depends on Nato alongside a bilateral defence pact with Washington.

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