Fishing for answers on Icelanders' opposition to joining the EU

ICELAND LETTER:TWO SMELLS mingle uncomfortably around the main harbour of the Westman Islands, off the south coast of Iceland. One wafts from the produce landed by the many trawlers berthed here at one of the country's main fishing posts, the other is a sulphurous whiff rolling down from the volcano that towers over this remote settlement.

On the morning of November 14th, 1963, a column of black dust arose from the sea just off the main island, thus beginning a four-year eruption of Eldfell volcano that led to the evacuation of 5,000 homes and the creation of a 200m (656ft) mountain.

Today, the volcano is quiet and the island is a centre of the thriving Icelandic fishing industry, one of the largest, most efficient and most environmentally sensitive in the world. With the rise of giant factory ships, some of the activity has transferred offshore, but fishing remains the mainstay for these rugged islanders.

We’ve come to the Westman Islands (named after escaped Irish slaves; “Westman” is the Norse for Irish) at the invitation of the EU to learn why so many Icelanders are opposed to the country’s application to join the union. Iceland applied to join in 2009 and negotiations opened last year, but there isn’t much enthusiasm for a deal.

On the islands, no one wants to talk. “There’s a very interesting debate going on and we’re following it closely,” says one fisherman, who could easily switch to a career in public relations.

“I doubt it would change all that much if we joined,” is the most another man will venture. “There will still be rough weather.”

Typical islanders’ reserve has kicked in, but there is also a reluctance to reveal the details of a highly lucrative business. Fishing accounts for about 40 per cent of Iceland’s foreign earnings and the owners of the biggest fleets are among the country’s richest people. Fishermen earn about €8,000 to €9,000 a month to trawl the mountainous seas off the islands, said to be the windiest place of habitation on Earth.

Ordinary Icelanders have taken a hit after the Icelandic krona lost about half its value when the country’s economic crisis erupted three years ago. In contrast, the fishing industry is on a roll sustained by hard-currency export payments. Icelanders own vast swathes of the fishing industries in the UK, Holland and Germany.

Fishing is the one area where tiny Iceland could make its presence felt within the EU. The fleet is modern and efficient; just 1,500 Icelandic fishing boats catch 40 per cent more than Spain’s 11,000 vessels. Iceland’s 4,000 fishermen, working the country’s 200-mile zone, land about 1.5 million tons of fish a year, compared to an EU total of 4.6 million.

All nations act out of a sense of self-interest, but Icelanders have brought this approach to an art-form. In the 1970s, the country unilaterally established a 200 nautical mile limit around its waters in defence of its fishing industry, and won the “cod war” that ensued with the UK.

More recently, it allowed its overborrowed banks to fail, thereby avoiding the cost of a rescue deal akin to that undertaken in Ireland.

Today, a sizable proportion of the population is prepared to see what comes out of the negotiations with the EU.

Iceland’s bid to join the EU differs from the other applications in the pipeline. It enjoys a high standard of living, in contrast to other applicants, and it boasts a long democratic history. The country is already in the European Economic Area and the European Free Trade Association, as well as Nato, and enjoys the benefits that go with these memberships.

As with most issues in Iceland, public opinion is split; roughly one-third of the population is implacably opposed to joining the union, while another third favours closer association. The remainder swings back and forth but, at the moment, the balance of opinion is on the No side.

The anti-campaign puts forward a curious cocktail of arguments – historical, cultural and economic – for staying out of the EU. Pall Vilhjalmsson, a former journalist who heads up the Heimssyn (World View) organisation that campaigns against EU membership, claims Iceland has developed separately from other European nations, and has always existed in “splendid isolation”.

“We’re a micro-state. Nothing we could do or say would in any way influence the world. Our nearest neighbours are all non-EU states, and there are no foreign powers threatening us.”

Yes campaigners stress the economic benefits they say will flow from joining the euro. As the world’s smallest floating currency, the krona is prone to wild fluctuations, and attaching Iceland to the euro would bring stability.

On the Westman Islands, this argument cuts no ice. The fisheries owners already do their accounts in euro, but that doesn’t mean they want it at home. “We have a good deal here, and we know it,” one man concedes.