Iceland and economic integration: in or outside the European Union?

Hilmar Þór Hilmarsson

Abstract


Iceland is a member of the European Free Trade Association, the European Economic Area and Schengen.It was a European Union candidate country until recently, when its government decided to withdraw its Eu­ropean Union membership application. The European Economic Area agreement currently ensures Iceland’s access to the European Union’s common market. The question remains what is the most feasible arrangement for long term prosperity of Iceland? Should it continue to rely on the current arrangement? Should it seek European Union membership in the future and perhaps subsequently become part of the Euro Area? What are the possible benefits and disadvantages for Iceland joining the European Union and the Euro Area? These questions have economic, political as well as security dimensions.


Keywords


Economic integration; small states; Iceland; global crisis; economic policy

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DOI: http://dx.doi.org/10.7220/AESR.2335.8742.2017.11.1.3

ISSN 1822-7996 (Print)

ISSN 2335-8742 (Online)