MAZOE FORD, REPORTER: Iceland sits on the edge of Europe. Now the people here must decide whether they might want to be closer to it.

On Saturday Icelanders will vote in a referendum on whether to reopen negotiations to join the European Union. If it’s a yes, they’d have a second vote later to seal the deal or not.

ÓÐINN FREYR BALDURSSON, YES CAMPAIGNER:  It could bring so many opportunities for us, especially for the young people

MAGNEA GNÁ JÓHANNSDÓTTIR, NO CAMPAIGNER:  I feel like we would drown in Europe

MAZOE FORD:  We’ve come to Iceland to find out what’s at stake for the almost 400,000 people who live here and what the EU might want out of this too. 

On the West Coast of Iceland the Snæfellsnes Peninsula is famous for its appearance in Game of Thrones but it’s also home to a thriving fishing industry and fishing is at the centre of the EU debate.

Arnar Kristjánsson’s family business has been working in Icelandic waters for more than 70 years. He’s against joining the EU.

ARNAR KRISTJÁNSSON, FISHING COMPANY OWNER:  The big companies in Europe will swallow up all these small companies and for small towns like this, there will be no more fish production.

MAZOE FORD: Sustainable fishing is central to Iceland’s identity and economy – only Icelandic ships can fish here.

But if the country joins the EU many fear the bloc’s Common Fisheries Policy would mean these exclusive waters would become a free for all.

ARNAR KRISTJÁNSSON: We try to use our fish stocks in a way that they can keep producing. Europe has not done that. Many of their fish stocks are in a very bad shape. We don’t like to have that here

MAZOE FORD:  He’s also worried for Iceland more broadly.

ARNAR KRISTJÁNSSON:  I think that we are letting some of our independence, giving up some of it, by joining the EU

MAZOE FORD:  Iceland’s been proudly independent since it broke away from Denmark in 1944.

It first looked at EU entry 17 years ago after the global financial crisis but walked away after disagreements mostly on fishing.

But the world’s changed a lot since then.

Iceland sits across from Greenland, just beside the Arctic Circle – a region the US, Russia and China all want to exploit for resources and new shipping channels.

US President Donald Trump’s ongoing campaign to slap tariffs on allies and his threats to annex Greenland before confusing it with Iceland in a speech have startled people here.

DONALD TRUMP, UN PRESIDENT (January 2026):  Stock market took the first dip yesterday because of Iceland, so Iceland’s already cost us a lot of money. 

MAZOE FORD:  Iceland’s already a member of the defence alliance NATO. Now the government wants extra reinforcement with EU membership as well.

Reykjavik MP Dagur Eggertson is a prominent voice for the campaign.

DAGUR B. EGGERTSON, MP FOR REYKJAVIK NORTH:  We are optimistic, but we know that this could go either way.

I think all countries, especially small and middle-sized countries, have to re think their position and take in how the world has changed.

Wars are not just wars fought with weapons. We also see trade wars going on and threats of tariffs. So tariffs are being weaponized. So where should we, as Icelanders, seek tighter bonds? And I see that within the EU. 

MAZOE FORD:  On the sticking point of fish.

DAGUR B. EGGERTSON: Fishing history matters very much. The detailed plan of how to handle this has been met with words of flexibility and openness on EU’s behalf. The reality…

MAZOE FORD:  That would be a big compromise though, wouldn’t it?

DAGUR B. EGGERTSON: It would, but…

MAZOE FORD:  Would the EU make that?

DAGUR B. EGGERTSON: One of the arguments for a yes in this referendum is exactly to go into negotiations. 

MAZOE FORD:  For Icelanders who support the Yes side the most compelling argument is around cost of living.

Living standards and wages are high but so are inflation and interest rates. 

Twenty-one-year-old economics student Óðinn Freyr Baldursson is saving up for his first home.

ÓÐINN FREYR BALDURSSON: The interest rates for mortgages, regular mortgages for homes are around 9 per cent here in Iceland

MAZOE FORD:  Wow. 9 per cent. 

ÓÐINN FREYR BALDURSSON: Yeah, which is more than two times higher than most other places in Europe. And that’s the main reason why owning a house here in Iceland is so, so tough. 

MAZOE FORD:  And if you were in the EU, how do you think that would change? 

ÓÐINN FREYR BALDURSSON: Well, just based off of the experience of other countries joining the EU, we can expect that interest rates will decrease by three to four, maybe 5 per cent. 

MAZOE FORD:  Óðinn leads the Young Europeans in Iceland Group and has been making ‘Yes’ campaign videos for social media. He wants the volatile currency here, the Icelandic krona, to be replaced with the euro.

ÓÐINN FREYR BALDURSSON: We need more stability if we want to continue to develop as a country and an economy. and I think the euro is the way to do that.

STEINAR KOLBEINS, NO CAMPAIGNER:  Telling people, yeah, we just need to go into the EU because we have so high interest rates, because we have so high inflation. For me, that’s just that the government’s not doing their job.

MAZOE FORD:  This is No HQ where volunteers are calling thousands of Icelanders day and night and making social media content.

Two of the head No campaigners are Magnea Gna Johannsdottirs and Steinar Kolbeins.

MAGNEA GNÁ JÓHANNSDÓTTIR, NO CAMPAIGNER:  So for me, I don’t want to go to the EU because I want decisions. I want them to be made in Iceland by Icelanders. I don’t want to sell EU the right of our natural resources or fisheries or farmings and all of the other things that are part of the European Union. 

MAZOE FORD:  What’s wrong with having negotiations?

MAGNEA GNÁ JÓHANNSDÓTTIR: It’s not a journey that’s free. It costs money. It costs the time of the government.

STEINAR KOLBEINS: It’s a difficult process and it takes the focus away from other big issues 

MAZOE FORD:  Opinion polls here show this referendum is on a knife edge. 

DAGUR B. EGGERTSON: Now we have the natural step to take to have a seat at the table

STEINAR KOLBEINS:  How does the seat at the table look like? What’s the size of the chair? And what’s the trade off?

MAZOE FORD:  The EU will be watching what happens on Saturday closely.

Given how peaceful, prosperous and well-positioned Iceland is, this Nordic nation would be seen by many in Brussels as a very good get.

For the Icelandic people though, the vote is not about what’s in it for the EU but all about what’s in it for them.