Sources close to Morgunblaðið report that the Social Democrats and the
Leftist-Greens have reached a deal with regards to the European Union –
perhaps the biggest matter of contention between the two parties.
While the source has said that nothing has been formally verified, the thumbnail sketch seems to be that the decision of whether or not to apply for membership within the EU will be put to a vote in parliament. The two parties have apparently “agreed to disagree” on the EU question.
The Social Democrats would like to see Iceland join the EU as soon as possible, while the Leftist-Greens contend that Iceland’s interests would be best served outside the EU. Both parties support putting the matter to a national referendum.
It is expected that other smaller details of how the two parties will govern will be worked out through the week, with a new government to be announced possibly by the week’s end.
Opinion polls have shown Icelanders more or less split on the EU question, leaning towards wanting to remain out. Many fear they will lose sovereignty over their fishing waters – a backbone of the Icelandic economy – and that unemployment will rise. Other critics point out that even if Iceland were to apply for membership, and even if Iceland were to be accepted, it is not likely that the country would reap any economic benefits for years. Pro-EU pundits have maintained that it would be possible to negotiate with the EU about fishing rights, and that the Icelandic crown is too small to be stable.