Identifier
Created
Classification
Origin
09REYKJAVIK11
2009-01-21 17:11:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Reykjavik
Cable title:
EU Accession: How Iceland might start heading to Brussels
how-toVZCZCXRO1688 PP RUEHAG RUEHAST RUEHDA RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA RUEHLN RUEHLZ RUEHNP RUEHPOD RUEHROV RUEHSK RUEHSR RUEHVK RUEHYG DE RUEHRK #0011/01 0211711 ZNR UUUUU ZZH P 211711Z JAN 09 FM AMEMBASSY REYKJAVIK TO RUEHC/SECSTATE WASHDC PRIORITY 3948 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE RUEKJCS/SECDEF WASHDC RUEATRS/DEPT OF TREASURY WASHINGTON DC RUEAIIA/CIA WASHDC
UNCLAS SECTION 01 OF 03 REYKJAVIK 000011
SENSITIVE
SIPDIS
STATE FOR EUR/NB, INR-B
OSLO FOR DATT
DOD FOR OSD-P (FENTON)
TREASURY FOR LAWRENCE NORTON AND ERIC MEYER
E.O. 12958: N/A
TAGS: PGOV PREL ECON EUN IC
SUBJECT: EU Accession: How Iceland might start heading to Brussels
Ref: 08 Reykjavik 286
UNCLAS SECTION 01 OF 03 REYKJAVIK 000011
SENSITIVE
SIPDIS
STATE FOR EUR/NB, INR-B
OSLO FOR DATT
DOD FOR OSD-P (FENTON)
TREASURY FOR LAWRENCE NORTON AND ERIC MEYER
E.O. 12958: N/A
TAGS: PGOV PREL ECON EUN IC
SUBJECT: EU Accession: How Iceland might start heading to Brussels
Ref: 08 Reykjavik 286
1. (SBU) Summary: After the October financial crash, possible
European Union (EU) membership and the adoption of the euro have
become the most important political issue in Iceland. Iceland's
political parties are wrestling with how to adjust their policies to
accommodate this new reality (reftel). Post offers the following
projection for the mechanics of an Icelandic decision to accede to
the EU, assuming positive comments by EU Enlargement Commissioner
Olli Rehn are an accurate indicator of the mood in Brussels and
other EU capitals. End summary.
General Background
--------------
2. (U) After the October financial crash, possible European Union
(EU) membership and the adoption of the euro have become the most
important political issue in Iceland. Only one political party, the
Foreign Minister's Social Democratic Alliance (SDA),is outright
pro-EU. On January 16, the Progressive Party (PP) decided to put EU
accession negotiations on the party agenda given certain conditions.
One more is likely to move in that direction at the end of January,
namely the Prime Minister's Independence Party (IP). The Left-Green
Movement (LGM) will most likely continue to be against EU
membership, although it has been trying to placate voters by saying
they would not be against holding a referendum on whether or not to
start accession negotiations. The Liberal Party (LP) is reviewing
the issue and will make a final decision at a party meeting in
April. The LP has been getting little support in the polls lately
and could be wiped out in the next elections, that is if it fails to
garner five percent of the vote that is needed to get at least one
Member of Parliament.
January-February 2009
Progressive Party
--------------
3. (SBU) On November 15, the PP central committee decided to move
the party general meeting up to January 16-18, instead of holding it
in the fall of 2009. The general meeting passed a proposal stating
that Iceland should start accession negotiations with the EU, but
offered a detailed list of conditions for Icelandic membership.
Some of these -- particularly on the use of Icelandic natural
resources and fisheries -- could pose challenges in talks with
Brussels.
4. (U) On November 17, PP Chair Gudni Agustsson resigned as chairman
of the party and as Member of Parliament. On December 4, PP Deputy
Chair Valgerdur Sverrisdottir said she would not seek reelection as
Deputy Chairman and would not be a candidate for the chairmanship of
the party either. Hence, the PP elected new leadership at the
general meeting. The new chairman is a young political novice,
Sigmundur David Gunnlaugsson, a former news reporter. In so doing,
the party turned its back on representatives of the past, as the
positions of deputy chair and secretary were also filled with
relatively new people.
5. (SBU) In terms of party following it is difficult to say whether
this change in policy would have a positive or a negative support,
because it could simultaneously turn off rural voters, yet attract
urban voters. However, the election of the new leadership may
revitalize the party and make a more attractive alternative to
voters.
Independence Party
--------------
6. (U) The central committee and the parliamentary group of the IP
decided on November 14 to move the party general meeting up to
January 29-February 1, instead of holding it in the fall of 2009.
The central committee and the parliamentary group also decided to
appoint a European Committee to discuss the pros and cons of EU
membership and reassess Iceland's position vis-a-vis the EU. The
European Committee is supposed to conclude its work before the
general meeting, and meeting attendees will then vote on a proposal
stating that Iceland should start accession negotiations with the
EU.
7. (SBU) The party's general meeting is bound to offer heated
debates. Most observers anticipate that the proposal on starting
accession negotiations will be passed, however, this is not a given.
If the proposal is struck down, the future of the current IP-SDA
coalition is at risk of falling apart. On December 14, SDA Chair and
Foreign Minister Ingibjorg Solrun Gisladottir strongly indicated
that a no-vote on that front would mean that the coalition would
break down, which would require elections to be held. The pundits do
REYKJAVIK 00000011 002 OF 003
not agree on whether the IP could handle a drastic change in EU
policy; some say it would split the party, others say it would be
left intact. There are three possible scenarios:
Scenario 1
The general meeting resolves that Iceland should apply for EU
membership and start accession negotiations. The party does not
split and probably gains back some of the loss in party support over
the preceding months.
Scenario 2
The general meeting resolves that Iceland should apply for EU
membership and start accession negotiations. The party splits into
two factions: 1) The old IP that supported the EU proposal and 2)
The home-rule style anti-EU party. The IP will lose a large share of
its following, but would maintain the coalition with the SDA. The
breakaway party is likely to ally with the LGM on EU membership,
especially in the run-up to a referendum on the EU (on accession
negotiations and/or membership).
Scenario 3
The general meeting resolves that Iceland should not apply for EU
membership and start accession negotiations. However, the election
on the proposal will be close. The party stays intact, but will
probably lose some of its following over to the SDA and/or the PP.
Given the close election, voters will see that the IP is split on
the issue and pro-EU voters will therefore be reluctant to vote for
the party in the next elections. Instead voters will flock to the
SDA and PP, which are more likely to move Iceland in the direction
of EU membership.
8. (SBU) In terms of party leadership, Geir Haarde will most likely
be reelected chairman despite some indications of discontent among
the party rank-and-file. Deputy Chair Thorgerdur Katrin
Gunnarsdottir may be challenged to her position by MP Bjarni
Benediktsson, who is tipped to soon replace Bjorn Bjarnason as the
Minister of Justice.
February 2009
--------------
9. (U) Should the above predictions play out, there will possibly be
three pro-EU parties in Iceland: The IP, the PP, and the SDA. All of
them will advocate that Iceland apply for EU membership and start
accession negotiations.
February-April 2009
--------------
10. (SBU) One of two scenarios is likely to happen:
1) The government (IP-SDA coalition) drafts its objectives for
accession negotiations, and decides to put the question of whether
to start accession negotiations to a referendum. If passed, then the
coalition parties present a bill in parliament on a constitutional
amendment that would authorize ceding some of Iceland's sovereignty
(sharing sovereignty with an international body in which Iceland has
membership with full rights). The constitutional amendment would
also stipulate that a referendum be held for this amendment to be
passed. This would allow Iceland to apply for EU membership.
Parliament passes the constitutional amendment. Then parliament
would need to be dissolved and new elections called that would be
held in the spring, or:
2) The government (IP-SDA coalition) drafts its objectives for
accession negotiations, The IP-SDA coalition decides to apply for EU
membership and thus start accession negotiations. The coalition
parties present a bill in parliament on a constitutional amendment
that would authorize ceding some of Iceland's sovereignty (sharing
sovereignty with an international body in which Iceland has
membership with full rights). The constitutional amendment would
also stipulate that a referendum be held for this amendment to be
passed. This would allow Iceland to apply for EU membership.
Parliament passes the constitutional amendment. Then parliament
would need to be dissolved and new elections called that would be
held in the spring.
April/May 2009
--------------
11. (SBU) Parliamentary elections where EU membership will be
fiercely debated. IP-SDA government (possibly with PP participation
or support).
May/June 2009
--------------
REYKJAVIK 00000011 003 OF 003
12. (SBU) Newly elected parliament passes for the second time the
bill on the above-mentioned constitutional amendment. Accession
negotiations between Iceland and the EU start in earnest. The
negotiations could be concluded by October-December.
December 2009-February 2010
--------------
13. (SBU) When negotiations conclude, the government calls a
referendum to vote on EU membership per the new constitutional
amendment. The other EU member states (27 if no other country has
joined by that time) need to approve Iceland's membership at the
same time.
July 1, 2010
--------------
14. (U) Iceland's EU membership could take effect.
Comment
--------------
15. (SBU) The above timeline simplifies a number of issues that are
likely to be very contentious, both in the domestic political arena
as well as in discussions with the European Commission and current
EU member states. Beyond the oft-cited fisheries question, there is
also the problem of negotiations between Iceland, Britain, the
Netherlands, and Germany over loans to cover Icelandic bank deposit
guarantees. Further, EU member states, already nervous about the
economic strength of the most recent new members, may be wary of
admitting highly indebted Iceland, years of positive comments by EU
Enlargement Commissioner Olli Rehn notwithstanding.
VAN VOORST
SENSITIVE
SIPDIS
STATE FOR EUR/NB, INR-B
OSLO FOR DATT
DOD FOR OSD-P (FENTON)
TREASURY FOR LAWRENCE NORTON AND ERIC MEYER
E.O. 12958: N/A
TAGS: PGOV PREL ECON EUN IC
SUBJECT: EU Accession: How Iceland might start heading to Brussels
Ref: 08 Reykjavik 286
1. (SBU) Summary: After the October financial crash, possible
European Union (EU) membership and the adoption of the euro have
become the most important political issue in Iceland. Iceland's
political parties are wrestling with how to adjust their policies to
accommodate this new reality (reftel). Post offers the following
projection for the mechanics of an Icelandic decision to accede to
the EU, assuming positive comments by EU Enlargement Commissioner
Olli Rehn are an accurate indicator of the mood in Brussels and
other EU capitals. End summary.
General Background
--------------
2. (U) After the October financial crash, possible European Union
(EU) membership and the adoption of the euro have become the most
important political issue in Iceland. Only one political party, the
Foreign Minister's Social Democratic Alliance (SDA),is outright
pro-EU. On January 16, the Progressive Party (PP) decided to put EU
accession negotiations on the party agenda given certain conditions.
One more is likely to move in that direction at the end of January,
namely the Prime Minister's Independence Party (IP). The Left-Green
Movement (LGM) will most likely continue to be against EU
membership, although it has been trying to placate voters by saying
they would not be against holding a referendum on whether or not to
start accession negotiations. The Liberal Party (LP) is reviewing
the issue and will make a final decision at a party meeting in
April. The LP has been getting little support in the polls lately
and could be wiped out in the next elections, that is if it fails to
garner five percent of the vote that is needed to get at least one
Member of Parliament.
January-February 2009
Progressive Party
--------------
3. (SBU) On November 15, the PP central committee decided to move
the party general meeting up to January 16-18, instead of holding it
in the fall of 2009. The general meeting passed a proposal stating
that Iceland should start accession negotiations with the EU, but
offered a detailed list of conditions for Icelandic membership.
Some of these -- particularly on the use of Icelandic natural
resources and fisheries -- could pose challenges in talks with
Brussels.
4. (U) On November 17, PP Chair Gudni Agustsson resigned as chairman
of the party and as Member of Parliament. On December 4, PP Deputy
Chair Valgerdur Sverrisdottir said she would not seek reelection as
Deputy Chairman and would not be a candidate for the chairmanship of
the party either. Hence, the PP elected new leadership at the
general meeting. The new chairman is a young political novice,
Sigmundur David Gunnlaugsson, a former news reporter. In so doing,
the party turned its back on representatives of the past, as the
positions of deputy chair and secretary were also filled with
relatively new people.
5. (SBU) In terms of party following it is difficult to say whether
this change in policy would have a positive or a negative support,
because it could simultaneously turn off rural voters, yet attract
urban voters. However, the election of the new leadership may
revitalize the party and make a more attractive alternative to
voters.
Independence Party
--------------
6. (U) The central committee and the parliamentary group of the IP
decided on November 14 to move the party general meeting up to
January 29-February 1, instead of holding it in the fall of 2009.
The central committee and the parliamentary group also decided to
appoint a European Committee to discuss the pros and cons of EU
membership and reassess Iceland's position vis-a-vis the EU. The
European Committee is supposed to conclude its work before the
general meeting, and meeting attendees will then vote on a proposal
stating that Iceland should start accession negotiations with the
EU.
7. (SBU) The party's general meeting is bound to offer heated
debates. Most observers anticipate that the proposal on starting
accession negotiations will be passed, however, this is not a given.
If the proposal is struck down, the future of the current IP-SDA
coalition is at risk of falling apart. On December 14, SDA Chair and
Foreign Minister Ingibjorg Solrun Gisladottir strongly indicated
that a no-vote on that front would mean that the coalition would
break down, which would require elections to be held. The pundits do
REYKJAVIK 00000011 002 OF 003
not agree on whether the IP could handle a drastic change in EU
policy; some say it would split the party, others say it would be
left intact. There are three possible scenarios:
Scenario 1
The general meeting resolves that Iceland should apply for EU
membership and start accession negotiations. The party does not
split and probably gains back some of the loss in party support over
the preceding months.
Scenario 2
The general meeting resolves that Iceland should apply for EU
membership and start accession negotiations. The party splits into
two factions: 1) The old IP that supported the EU proposal and 2)
The home-rule style anti-EU party. The IP will lose a large share of
its following, but would maintain the coalition with the SDA. The
breakaway party is likely to ally with the LGM on EU membership,
especially in the run-up to a referendum on the EU (on accession
negotiations and/or membership).
Scenario 3
The general meeting resolves that Iceland should not apply for EU
membership and start accession negotiations. However, the election
on the proposal will be close. The party stays intact, but will
probably lose some of its following over to the SDA and/or the PP.
Given the close election, voters will see that the IP is split on
the issue and pro-EU voters will therefore be reluctant to vote for
the party in the next elections. Instead voters will flock to the
SDA and PP, which are more likely to move Iceland in the direction
of EU membership.
8. (SBU) In terms of party leadership, Geir Haarde will most likely
be reelected chairman despite some indications of discontent among
the party rank-and-file. Deputy Chair Thorgerdur Katrin
Gunnarsdottir may be challenged to her position by MP Bjarni
Benediktsson, who is tipped to soon replace Bjorn Bjarnason as the
Minister of Justice.
February 2009
--------------
9. (U) Should the above predictions play out, there will possibly be
three pro-EU parties in Iceland: The IP, the PP, and the SDA. All of
them will advocate that Iceland apply for EU membership and start
accession negotiations.
February-April 2009
--------------
10. (SBU) One of two scenarios is likely to happen:
1) The government (IP-SDA coalition) drafts its objectives for
accession negotiations, and decides to put the question of whether
to start accession negotiations to a referendum. If passed, then the
coalition parties present a bill in parliament on a constitutional
amendment that would authorize ceding some of Iceland's sovereignty
(sharing sovereignty with an international body in which Iceland has
membership with full rights). The constitutional amendment would
also stipulate that a referendum be held for this amendment to be
passed. This would allow Iceland to apply for EU membership.
Parliament passes the constitutional amendment. Then parliament
would need to be dissolved and new elections called that would be
held in the spring, or:
2) The government (IP-SDA coalition) drafts its objectives for
accession negotiations, The IP-SDA coalition decides to apply for EU
membership and thus start accession negotiations. The coalition
parties present a bill in parliament on a constitutional amendment
that would authorize ceding some of Iceland's sovereignty (sharing
sovereignty with an international body in which Iceland has
membership with full rights). The constitutional amendment would
also stipulate that a referendum be held for this amendment to be
passed. This would allow Iceland to apply for EU membership.
Parliament passes the constitutional amendment. Then parliament
would need to be dissolved and new elections called that would be
held in the spring.
April/May 2009
--------------
11. (SBU) Parliamentary elections where EU membership will be
fiercely debated. IP-SDA government (possibly with PP participation
or support).
May/June 2009
--------------
REYKJAVIK 00000011 003 OF 003
12. (SBU) Newly elected parliament passes for the second time the
bill on the above-mentioned constitutional amendment. Accession
negotiations between Iceland and the EU start in earnest. The
negotiations could be concluded by October-December.
December 2009-February 2010
--------------
13. (SBU) When negotiations conclude, the government calls a
referendum to vote on EU membership per the new constitutional
amendment. The other EU member states (27 if no other country has
joined by that time) need to approve Iceland's membership at the
same time.
July 1, 2010
--------------
14. (U) Iceland's EU membership could take effect.
Comment
--------------
15. (SBU) The above timeline simplifies a number of issues that are
likely to be very contentious, both in the domestic political arena
as well as in discussions with the European Commission and current
EU member states. Beyond the oft-cited fisheries question, there is
also the problem of negotiations between Iceland, Britain, the
Netherlands, and Germany over loans to cover Icelandic bank deposit
guarantees. Further, EU member states, already nervous about the
economic strength of the most recent new members, may be wary of
admitting highly indebted Iceland, years of positive comments by EU
Enlargement Commissioner Olli Rehn notwithstanding.
VAN VOORST