Analysis | If you were thrilled by Icelandic football this summer, you’ll love the political drama the country is in for in the coming months
In terms to foreign affairs, Iceland could not have asked for a better summer, particularly coming on the heels of a spring which saw the rapid fall of the Sigmundur Davíð Gunnlaugsson government, another casualty of the Panama Papers scandal.
After being the recipient of a Hvannadalshnúkur-sized amount of international publicity as a result of the excellent showing by the country’s football team at Euro 2016, the question of Iceland and the world is now shaping up to be much more complicated this coming autumn. The impending parliamentary elections (the date yet to be confirmed) will likely usher in a new government which will inherit a growing list of foreign-policy challenges from both old and new directions.
Developing trade within a still volatile global economy remains a priority and includes balancing traditional partners like the European Union with newer ones such as China (the free-trade agreement with Beijing marks its second anniversary this month). Of course, much has changed in the EU since summer began. Aftershocks from the June referendum in the United Kingdom and the looming prospect of ‘Brexit’ has affected all of Europe and Iceland has been no exception.
The recent suggestion by outgoing president Ólafur Ragnar Grímsson that the UK could join a potential northern trade bloc which would include Iceland, Norway and possibly Greenland and the Faroes may be overly fanciful, especially considering that not so long ago Britain and Iceland were at odds over the Icesave debacle. However, given that bilateral trade in 2015 reached 107 billion kronúr ($871 million), a volume second only to the Netherlands that year, it is no surprise that discussion has already begun about a possible UK free-trade agreement should Britain’s departure from the European Union be finalised.
Relations with the United States have also changed significantly over the summer in light of the joint declaration signed in June between the US Department of Defence and the Icelandic Ministry for Foreign Affairs. The declaration was struck in order to augment the ‘Joint Understanding’ document signed in 2006, the same year US forces withdrew from their base at Keflavík.
The revised agreement promised the two states would continue to share defence information and allowed for potential future use of Icelandic facilities by the US military and other Nato actors, as well as an intent to pursue future discussion about a further deepening of security co-operation.
In light of increasing Russian maritime activity, including submarine incursions, in the North Atlantic, as well as the growing debate in Finland and Sweden about potential Nato membership, the European Arctic is once again shaping up to be a major area of strategic concern. It was no surprise that regional security concerns topped the agenda at the May summit between US President Barack Obama and the leaders of the five Nordic states.
On the home front, Píratar (the Pirate Party) remains popular, according to recent polls, with a strong possibility that the party, well-known for its outsiders’ stance on politics, might form part of the next government. The party has called for a binding referendum on membership in the European Union, but beyond that there is little information about other aspects of the Pirate Parts’ foreign-policy platform.
As well, Mr Grímsson’s long tenure as president was marked by much activity in promoting Iceland abroad, especially in regards to the Arctic, and so there will now be the question of how the new president, Guðni Th. Jóhannesson, will put his own stamp on Icelandic foreign affairs. Much recent discussion about a political generational change in Iceland has centred on domestic policies, but the new shape of the island’s government will have a great affect on European, Arctic and global affairs as well.
The author is a senior research fellow at the Norwegian Institute of International Affairs (NUPI) in Oslo.
Originally published by The Arctic Journal. Re-published here with the permission of the author.
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