Should Iceland Join the European Union?

October 6, 2025 by Dan Mitchell @ International Liberty

I left Iceland this morning, where I spoke at a conference examining whether that island nation in the North Atlantic should join the European Union.

My speech focused on the European Union’s economic performance (which is anemic and on a downward trajectory) and my main takeaway is that joining the E.U. would be akin to booking a ticket on the Titanic.

After it hit the iceberg!

More specifically, the E.U. is almost surely destined to suffer a massive fiscal crisis and more responsible nations in the region will be expected to bail out the irresponsible countries such as France and Italy.

Not just “expected.” Both the European Commission and the European Central Bank already have violated their charters to prop up profligate governments, so the only unknown is the degree to which taxpayers in countries such as Estonia and Denmark will get pillaged.

And Iceland, if it decides to climb on the E.U.’s sinking ship.

To augment my views, I want to share a couple of slides from a presentation by Professor Ragnar Arnason, an economist from the University of Iceland.

Here’s his analysis regarding whether there would be a net economic benefit if Iceland joined the E.U.

As you can see, he is very skeptical.

He also had some slides examining national security arguments and social arguments.

In both cases, he explained that likely costs of E.U. membership would be much higher than likely benefits.

But here’s the most interesting part of his presentation.

As shown by this next slide, he makes the elementary – but insightful – observation that there is no downside to saying no today and seeing what happens in the future.

From this perspective, the strong case against joining the E.U. becomes a slam-dunk case.

For what it’s worth, I’ve written that E.U. membership may make sense for a poor nation from Eastern Europe (and the case is weak even for those countries).

For a relatively prosperous country like Iceland, E.U. membership would be a lot of pain and little if any gain.

P.S. If you want to enjoy some E.U.-themed humor, click here and here.