The EU’s reduced attractiveness for prosperous countries

Djoomart Otorbaev, the former Prime Minister of Kyrgyzstan, in a LinkedIn post after the referendum, described Iceland’s vote as giving Europe’s Eurosceptics new momentum. In his view, the result was not a rejection of Europe, since Iceland is already deeply integrated through the internal market and Schengen, but a rejection of the assumption that deeper European integration must culminate in EU membership. He also emphasised that Iceland’s prosperity and high level of education undercut the familiar caricature of Euroscepticism as ignorance, provincialism or lack of sophistication. For him, the failure of the Yes campaign lay in its inability to explain why Iceland should surrender additional political autonomy when the opposing side could speak in the language of independence and sovereignty.

Three further LinkedIn reactions sharpen the picture. The International Centre for Defence and Security circulated Steven Blockmans’s assessment, first published in Internationale Politik Quarterly, under the title Iceland’s Voters Give the EU the Cold Shoulder. Its importance lies in the opposite perspective: the negative outcome was presented as inadvertently hurting the Union because it removed a chance to reenergise enlargement and reform. That reading is useful because it confirms what a pro-integration observer sees at stake. Iceland was not merely another small state making a domestic choice; it would have supplied the EU with a wealthy, democratic and already integrated candidate at a difficult moment for enlargement.

A second reaction came from Mackinnons Solicitors, which highlighted the role of fisheries in the referendum. Cameron Milne’s analysis treated the No as a reminder that fishing is never merely a sectoral issue in Iceland. It is tied to sovereignty, coastal communities, international relations and geopolitics. This supports the argument made here that the Common Fisheries Policy cannot be assessed in Iceland as an ordinary policy field. For an island state whose constitutional memory and export economy are bound to control of surrounding waters, fisheries are part of the architecture of independence.

A third, more technical LinkedIn intervention by Daida Hadzic brought the EEA point back to the level of daily legal and compliance practice. She noted that, whatever the referendum result, Iceland’s underlying position remains unchanged: as an EEA/EFTA state it continues to incorporate much internal-market law into domestic legislation, while lacking a formal vote where that law is made. For cross-border mobility and compliance advisers, nothing changes immediately. The point is a useful corrective to triumphalism. The No vote protects the EEA/EFTA model, but it does not abolish its rule-taking asymmetry. That is why the post-referendum task is not self-congratulation, but institutional improvement.

The German-language assessment of the vote likewise confirms that the result cannot be reduced to ignorance or isolationism. Reporting on the reasons and consequences of Iceland’s rejection of new accession talks, the Neue Zürcher Zeitung placed the decision in the context of fisheries, sovereignty, prosperity, the EEA status quo and the political costs of reopening a process that had already failed once. That perspective is useful because it treats the referendum as a rational small-state choice rather than as a psychological deviation from the European mainstream. The No side did not need to deny Iceland’s European integration; it could rely on the fact that the country already enjoys much of the practical benefit of integration while retaining control over the most sensitive parts of statehood. The consequence is therefore not isolation, but a strengthened case for making the existing EEA/EFTA model work better.

A second Neue Zürcher Zeitung opinion piece drew the broader conclusion even more sharply: the Icelandic referendum exposed, without much mercy, the EU’s reduced attractiveness for prosperous countries. The issue is not that such states are anti-European. It is that their calculation is different from that of poorer or geopolitically vulnerable candidates. A wealthy, well-governed and already integrated country has to ask what accession would add beyond the EEA, and what it would cost in institutional autonomy, fisheries, agriculture, trade policy, currency and exposure to the Union’s redistribution and regulatory agenda. For likely net contributors, the promise of a seat at the table may no longer outweigh the submission to a political and judicial system increasingly shaped by centralisation, fiscal burdens and declining competitiveness. Iceland’s No therefore matters beyond Iceland because it shows that the EU’s problem is not merely enlargement fatigue among existing Member States, but attractiveness fatigue among successful outsiders.

As for the “geopolitical” argument advanced by the Yes side, Lea Verst hit the nail on the head on German NTV. The headline of her article reads: “Icelanders fear EU bureaucracy more than Trump’s foreign policy.”

Prof. Dr. iur. Dr. rer. pol. h.c. Carl Baudenbacher

Baudenbacher Law AG, Lawyers & Advisors | Door Tenant Monckton Chambers | Visiting Professor London School of Economics | President of the EFTA Court 2003-2017