Iceland To Face Financial Challenges As Brexit Approaches

As British Prime Minister Boris Johnson pushes for the United Kingdom’s exit from the European Union with or without a deal, Iceland looks to be one of the countries to be most affected as reported by Visir. While Iceland is not in the EU, it is in the EEA, and the United Kingdom stands to be one of Iceland’s most important European economic partners. Ten percent of Iceland’s total exports go to the UK and value around 400 million pounds, or 60 billion Icelandic krona. This all could be jeopardised with complications in custom declarations, food labelling, and health certifications.

Then there is the economic scares that Brexit could bring to the tourist industry. So in case you missed the buzz of uncertainty that was graced to us by WowAir, future airline operations may be restricted with special permission requirements or reliant on a majority of EU member ownership to fly freely. The European Commission has adopted a regulation allowing flights from the U.K. to European cities until March of next year. However, going forward, 4,000-5,000 annual flights from the UK transporting 15-20% of Iceland’s foreign tourists could be affected.

The exact consequences are yet to be determined, but the risks are certainly high. The U.K. is expected to leave the European Union before October 31st, but even if a deal can be organised, Iceland likely has some financial challenges ahead.