Ten years have passed since the Brexit referendum, and six years since the United Kingdom officially left the European Union's single market. Over this period, the British economy has undergone significant transformations that are now clearly visible—reduced exports, less investment, increased paperwork, lower production, and long-term uncertainty that has undermined trust among businesses and investors. This is no longer just a political perspective but a verified reality supported by numerous independent studies.
Icelanders are now facing new questions about their future relationship with Europe. Should Iceland continue on the EEA path? Should it seek membership in the EU? Or should Iceland forge its own unique path? The experience from Britain is not entirely transferable to Iceland, but it is certainly a cautionary tale about what happens when a small or medium-sized country tries to operate outside the world’s largest economic area without securing full access to it.
What happened in Britain?
After leaving the EU, British companies quickly fell under new rules, new bureaucratic procedures, and new restrictions. Although no tariffs were imposed on goods traded within the EU, the administrative burden was so great that thousands of companies decided to abandon the UK altogether. According to data from the UK Office for National Statistics and independent research institutions, 16,400 companies ceased exporting to the EU from 2019. Smaller companies, which lacked the resources to manage new systems or secure funding, simply gave up.
British exports to the EU are now 14–16% lower than they would have been had the UK remained within the single market. Imports have also declined significantly. Meanwhile, service exports have performed better, but this does not change the overall picture—the British economy is 6–8% smaller than it would have been, according to recent studies from the Bank of England and NBER.
The most important point for Iceland, however, is not just the economic decline but the uncertainty itself. Nick Bloom, one of the leading economists at Stanford University, points out that half of the economic loss can be attributed to the length, ambiguity, and political instability of the Brexit process. Companies postponed investments, abandoned projects, and pulled back from expansion. Uncertainty is costly for small economies—and Iceland is one of the smallest economies in Europe.
What can we learn from this?
Iceland is not Britain. We do not have 67 million inhabitants, we are not former global powers, and we do not have a large industry built on complex supply chains. However, we share one thing with the British—we are dependent on exports and require stable access to foreign markets.
Thus, expert insights from Brexit highlight several lessons:
1. Access to the internal market is vital for a small economy.
Britain lost access to the world's largest market and experienced costs, delays, and barriers that did not exist before. Iceland has this access through the EEA—and it is the foundation of our prosperity.
2. Uncertainty is more expensive than any tariff.
Brexit shows that prolonged uncertainty can drain billions from investment. Iceland has experienced its own periods of uncertainty, such as after the banking crisis, and knows how damaging uncertainty can be.
3. EU regulations dictate whether we want them or not.
The British company Eskimo found itself unable to sell products to Australia or New Zealand without meeting EU standards. This is a crucial point—the EU sets global standards. Iceland follows these rules through the EEA—but has no influence over them.
4. Small countries need allies.
Britain is a large country and still faced difficulties. Iceland is a small country standing alone in the North Atlantic. We need allies, not isolation.
Should Iceland join the EU?
This is a political question that the nation must answer. But economic analysis can shed light on the options.
Benefits of membership:
Iceland would gain voting rights and could influence the rules it follows.
Companies would receive full and secure access to the internal market.
Investment would increase due to stability and predictability.
Costs of membership:
Iceland would lose some autonomy and have to follow rules it may not agree with.
Companies would face additional bureaucracy and compliance costs.
The government would have to pay higher contributions to the EU budget, potentially affecting domestic spending on healthcare, pensions, and infrastructure maintenance.
The impact on key industries—shipping and agriculture.
If Iceland joins the EU, the greatest changes would affect two of the country's main pillars of industry, where numbers show distinct indicators:
Shipping:
Iceland would gain full and duty-free access to all seafood products within the internal market, which could save the country around 10 billion kronor annually in export duties. In return, however, there would be the common fisheries policy of the EU (CFP). While the rule on historical share would protect the majority of the quota, the numbers show that Iceland would lose final control over fisheries management and agreements with third countries through Brussels.
Agriculture:
Today, Icelandic agriculture operates with state support amounting to tens of billions of kronor annually along with high import tariffs on imported agricultural products. With EU membership, tariffs on European agricultural products would decrease. This would lead to lower food prices for consumers, but it could also reduce the competitiveness of local producers who rely on high tariffs to maintain their market position.
5 reports
VísirIndependentCenterFactual 90Objective 6514 hr. agoThe article discusses the upcoming referendum on Iceland's membership in the European Economic Area (EEA), clarifying common misconceptions. It explains that Iceland is not voting on joining the EU but rather on continuing negotiations and maintaining flexibility to take a position later. The piece emphasizes that the future terms of the agreement are unknown and highlights the importance of considering all possibilities to secure Iceland’s strongest possible position for future generations. It also compares Iceland’s unique natural resources and economic strengths with Malta’s experience in the EEA, noting that Malta has achieved economic benefits without similar natural advantages. The author questions whether Iceland could achieve similar success through a strong agreement and a more stable economic framework.
Bias read (Center): The article presents a balanced view of the referendum issue, explaining both the current situation and potential outcomes without overtly favoring either side. While it highlights Iceland's strengths and challenges, it does not frame the discussion in a clearly left or right-leaning manner. The use
Why these scores (Factual 90 · Objective 65): This article presents a detailed analysis of the referendum, emphasizing the uncertainty surrounding potential outcomes and the implications of remaining in or leaving the EU. While factual, it leans towards caution and highlights risks associated with EU membership, showing a slight ideological til
Morgunblaðið / mbl.isIndependentCenterFactual 85Objective 7514 hr. agoThe article discusses the ongoing debate over Iceland's future within the European Union, focusing on major questions facing the nation ahead of the August 29 referendum. It highlights topics such as government transparency, the state of the currency, potential impacts on employment and housing, and how young people perceive their role in this significant political discussion. The piece covers recent news including whale hunting, the status of the Icelandic Police, education policies, and discussions around grading and standardized assessments in schools. Guests from different political backgrounds participate in the discussion, offering diverse perspectives on these issues. In the latter part of the program, representatives of youth organizations discuss the realities behind the national vote.
Bias read (Center): The article presents a balanced discussion with multiple political voices and does not exhibit clear bias through language or sourcing. It focuses on presenting various viewpoints rather than promoting a specific agenda.
Why these scores (Factual 85 · Objective 75): The article provides a comprehensive overview of public debate around Iceland's EU membership referendum, citing various perspectives from different political figures. It accurately reflects the general discussion and positions without clear bias, though some subjective language is present.
Morgunblaðið / mbl.isIndependentRightFactual 85Objective 70yesterday ESB-aðild væri slæm fyrir hótelThe article discusses concerns raised by Kristófer Oliversson, owner of CenterHótelanna, regarding the potential negative impact of Iceland joining the European Economic Area (EEA) on the hotel industry. He argues that membership could limit Iceland’s ability to negotiate favorable trade agreements, particularly with countries like China, and could reduce Iceland’s sovereignty by aligning more closely with EU rules. He warns that adopting the euro could lead to increased costs for hotels due to currency exchange fluctuations, potentially affecting profitability. The article highlights the broader implications of EEA membership on Iceland’s economic independence and suggests that current high wages and taxes in the hospitality sector may become unsustainable under such conditions.
Bias read (Right): The article frames concerns about EEA membership as a threat to national sovereignty and economic independence, using language that emphasizes loss of control and potential financial strain. It presents the perspective of a hotel owner who fears the economic consequences of joining the EEA, which is
Why these scores (Factual 85 · Objective 70): This article reports on a Gallup poll regarding the referendum, providing statistical data and context. It maintains a neutral tone but includes some interpretive commentary, which slightly affects objectivity.
RÚV FréttirState / PublicCenterFactual 85Objective 703 days agoThe latest Gallup poll in Iceland reveals a complex situation regarding voter intentions ahead of the referendum on joining the European Economic Area (EEA). The survey conducted between June 12th and 24th indicates that 39% of respondents are certain they will vote 'yes', while 35% are certain to vote 'no'. Additionally, 26% are undecided but not fully committed, and 13% are likely to vote 'yes' or 'no' depending on further information. The referendum, scheduled for August 29th, asks whether Iceland should maintain membership in the EEA. The discussion around the referendum has been more fragmented compared to previous elections, with differing opinions on the proposed policies and the direction of political parties. Experts suggest that the debate will remain complex and diverse, with clear positions among some parties, particularly those opposing the change. The impact of the referendum remains uncertain, and there is ongoing research into how voters engage with political content online and their trust in different sources.
Bias read (Center): The article presents a balanced overview of the referendum debate, highlighting both 'yes' and 'no' positions without overtly favoring either side. It includes expert commentary and statistical data without leaning toward any particular political ideology. While the topic is politically charged, the
Why these scores (Factual 85 · Objective 70): The article presents survey results accurately based on the Gallup poll data, showing percentages of support and opposition. It also mentions the timing of the poll and the context of the referendum topic. However, it includes some subjective analysis from Jón Gunnar Ólafsson, which introduces bias.
VísirIndependentCenterFactual 80Objective 604 days ago Brexit and Iceland - What can we learn and where should we go?The article discusses the economic and social impacts of Brexit on the United Kingdom over the past decade, highlighting reduced exports, lower investment, increased paper work, decreased production, and uncertainty affecting businesses and investors. It notes that these outcomes are now seen as established facts supported by numerous independent studies. The piece then turns to Iceland, suggesting that the country faces similar questions regarding its future relationship with Europe. It warns against repeating the UK’s mistakes, emphasizing the importance of maintaining access to the European market through the European Economic Area (EEA) agreement. The author argues that while the UK experience is not directly transferable to Iceland due to differences in size and structure, the lessons learned—such as the value of market access and the costs of prolonged uncertainty—are relevant. The article concludes by listing two key lessons from Brexit: the importance of access to the internal market and the high cost of long-term uncertainty.
Bias read (Center): While the article presents a critical view of Brexit's negative effects, it does not overtly favor one political ideology over another. Instead, it offers a balanced assessment of the UK's experience and applies those insights to Iceland's potential choices, without taking a clear partisan stance. S
Why these scores (Factual 80 · Objective 60): The article focuses on the potential negative impacts of EU membership on the hotel industry, using specific examples like the impact of currency changes. It presents a single perspective with limited counterpoints, suggesting a more biased stance toward EU membership.
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