Iceland and its participation in European economic integration: advantages and disadvantages of European Union and Euro Area membership

Hilmar Þór Hilmarsson
Additional contact information
Hilmar Þór Hilmarsson: University of Akureyri, Iceland

Theoretical and Applied Economics, 2018, vol. XXV, issue Special, 15-30

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 withdrew 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 advantages and disadvantages for Iceland joining the European Union and the Euro Area? These questions have economic, political as well as security dimensions. According to the article EFTA membership and the EEA agreement appear to be the best arrangement for Iceland at present. The EEA agreement decision shaping under the two-pillar structure of EEA EFTA bodies that match those on the EU side has so far served well. The three EEA countries have some modest influence under this system and this arrangement ensures access to the internal EU market. This can change in the medium or long-term and the decision made by the government of Iceland that Iceland should not be considered a candidate or potential EU candidate country may have been short sighted. Iceland should not make any decisions that cannot be reversed given how quickly the global environment can change.

Keywords: economic integration; small states; Iceland; global crisis; economic policy. (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://store.ectap.ro/suplimente/International_Fin ... ce_FIBA_2018_XVI.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:agr:journl:v:xxv:y:2018:i:special:p:15-30

Access Statistics for this article

Theoretical and Applied Economics is currently edited by Mircea Dinu

More articles in Theoretical and Applied Economics from Asociatia Generala a Economistilor din Romania / Editura Economica Contact information at EDIRC.
Bibliographic data for series maintained by Mircea Dinu ().