At the Tor fish processing plant in Hafnarfjörður, staff are flat out gutting, slicing and prepping cod, haddock and plaice.
In a whirlwind of energy, hundreds of freshly filleted fish are loaded onto a long boxed-in conveyor belt on which the catch is instantly frozen before it is packed into iceboxes, ready for export.
The fishing industry, as any local will tell you, is the lifeblood of Iceland’s economy and identity.
Most of the staff at the Tor plant, 30 minutes south of Reykjavík, are, ironically, from Poland, Lithuania, Venezuela – and Grimsby – to where much of this catch will be shipped.
Yet, there is no escaping the issue as Icelanders prepare to vote in a referendum to decide whether or not the country should revive EU accession negotiations.
“It’s fundamental,” says Eirikur Bergmann, Professor of Politics at Bifröst University.
“Iceland survives on fisheries. This is the backbone to Iceland’s economy. Even though Iceland is a small country of less than 400,000 people, Iceland would dominate fisheries within the European Union,” he says.
Arnar Atlason, Managing Director of Tor, sits behind a double monitor calmly tapping the space bar during an online fish auction, ordering thousands of kilos of fish from boats landed around Iceland.
Those catches will be trucked overnight to his plant, which his team of 25 staff will then gut during eight-hour shifts.
He is a relatively small producer among 50 operators across Iceland, turning over €10 million in business by processing 2,500 tonnes of fish per year, mostly destined for the UK market.
Arnar is, however, keenly aware of how divisive the EU referendum is.
“A lot of people here in Iceland are still undecided,” he tells me.
“Anyone saying they are decided and have been for a long time is lying. There is a great deal of underlying opportunities and threats. We live in a very changed world. Being a bigger part of the internal market of Europe, with all the business opportunities there, is quite important.
“But then again, our resource is what is keeping us alive on this island here up in the North Atlantic. So we have to protect our resources. We have to make the most of them and be careful with any agreements we do,” he says.
Despite this referendum being framed as driven by US President Donald Trump’s threats to take Greenland by force (and his oft-confusing of Iceland with Greenland), domestic politics appear to be a greater driver of the debate.
“The geopolitical upheaval around us comes into play,” says Prof Bergmann.
“It impacts the debate, but it’s not a driver of it. Calling the referendum predates the second term of Donald Trump and the aggression towards Greenland, but the debate is very domestically driven.”
Yet, the current pro-European coalition government consisting of the Social Democratic Alliance, Samfylkingin, the Liberal Reform Party, Viðreisn, and the populist centre-left People’s Party, Flokkur fólksins, is keeping a keen eye on the geopolitical moment and the upheaval in the Arctic’s security balance.
After President Trump’s threats to Greenland, the coalition brought forward the referendum – promised in 2024 when the government took office – from 2027 to tomorrow.
Iceland secured its independence from Denmark in 1944 and in 1949 was a founding member of the NATO alliance.
It has no standing army, and relies on its security through both NATO and a 1951 defence treaty with the United States.
NATO allies support Iceland’s 250-strong coastguard in monitoring more than 800,000 square miles of ocean for increasingly frequent Russian submarine and warplane activity.
Following the devastating banking crisis of 2008, Reykjavík formally applied for EU membership under the Social-Democratic/Green coalition.
The negotiations began in 2010, initially made good progress but quickly ground to a halt in 2013 once they hit the thorny issues of fisheries and agriculture.
In 2015, a new eurosceptic government unilaterally ended the talks, prompting the European Commission to adopt a new legal opinion which essentially put the process on hold.
Tomorrow’s referendum is all about reviving those negotiations.
However, both Iceland and the European Union are in a completely different place compared to 2013.
Iceland’s economy has flourished through fisheries, tourism, pharmaceuticals, IT and aluminium exports.
For the European Union, Russia’s invasion of Ukraine and the relentless hostility of the Trump administration have meant that enlargement is now a geo-strategic imperative.
“From both the Icelandic and EU perspectives, the current moment can be seen as genuinely distinct,” says Arno Minasian, of the Arctic Institute Centre for Circumpolar Security Studies.
“This is not simply because of Greenland, but also because several broader dynamics have converged: Arctic insecurity, shifting US behaviour, and the EU’s evolving ‘geopolitical enlargement’ logic.”
Iceland now has the fifth-highest GDP in the world and would potentially resume negotiations with the EU as a rich, Nordic economy strongly rooted in democracy and the rule of law.
As a net contributor, Iceland would have much stronger leverage in the negotiations compared to the 2010-2013 period, and as such foreign minister Þorgerður Katrín Gunnarsdóttir has warned that the country would demand some kind of carve-out from the EU’s Common Fisheries Policy (CFP).
“When it comes to fisheries, we are a superpower in Europe,” Ms Gunnarsdóttir recently told the FT.
“The EU has to take that into account. If they are not doing that, then it will be very difficult for us to negotiate.”
Prof Bergmann suggests that, if the referendum is favourable, any future Icelandic government would be on thin ice if it signed up to full application of the CFP. Fisheries account for 40% of Iceland’s exports and about 8% of GDP.
“It’s one of the founding pillars of our economy, and that means that the Common Fisheries Policy cannot be implemented unchanged in Iceland,” he says.
“Iceland would need a specific solution around its fishing grounds, and I can tell you for sure that no Icelandic government could ever surrender both formal and practical control over the fishing grounds. That’s absolutely clear.”
EU’s fisheries commissioner Costas Kadis has strongly signalled that in any negotiations the EU would be more flexible than it was last time around, suggesting some kind of carve-out from the CFP, although the Commission’s official response is only that in every accession process, the particularities of every candidate country are taken into account.
Marta Kos, the EU’s enlargement Commissioner, told Politico: “Some of Iceland’s particular characteristics, especially fisheries and agriculture, are so unique that they need to be given special consideration.”
That in turn has prompted a sharp warning from the Irish fishing industry that any sweetheart deal for Iceland must be replicated in Ireland.
“The main driver [in the campaign] seems to be geopolitics, security and defence,” says Aodh O’Donnell, CEO of the Irish Fish Producers Organisation (IFPO).
“But on the ground, fishing is really key. We are very consistent on this. We cannot have one set of rules for one island nation, and another set of rules for Ireland.
“If the European Commission accepts that the CFP cannot work for Iceland, then it must also acknowledge that the CFP is not working for Ireland,” says Mr O’Donnell.
“Ireland is an island nation with one of Europe’s richest marine resources. Yet for decades we have seen our fishing opportunities diminish while others benefit from access to our waters.
“If Iceland deserves a bespoke arrangement to protect its fishing industry, then Ireland deserves the same.”
Should the referendum pass tomorrow, says Mr O’Donnell, the Irish Presidency of the EU should “secure fair terms” as the negotiations get under way.
While it is unlikely that substantive negotiations would resume within the remaining four months of the Irish presidency, there is every likelihood that a Yes vote would prompt the European Commission to try and conclude accession negotiations as quickly as possible, potentially so that Iceland and Montenegro could be part of a joint ticket in 2028.
That is because Iceland, as a member of the European Economic Area (EEA), alongside Norway and Liechtenstein, is a member of the EU’s single market, and is already complying with all four freedoms – movement, capital, goods and services.
Iceland, therefore, has already swallowed most of the EU’s body of law, including competition and state aid, consumer protection, energy, environment and social policy, as well as research, education, public health and entrepreneurship.
Unlike the other front-row applicants, Montenegro, Albania, North Macedonia, Moldova and Ukraine, Iceland is already part of the passport-free Schengen travel area, and participates in a range of justice and home affairs policies.
The EU and Iceland are also aligned on key foreign policy issues and hold regular dialogues, cooperating through NATO and a Security and Defence Partnership signed in March of this year.
Many on the No side of the debate have argued that for this reason, there is no need for Iceland to join the EU.
That is rejected by Jónas Hagan, co-owner of Adira Investments and co-founder of the pro-negotiation campaign Já til að sjá.
He argues that both President Trump’s threats and the vulnerability of the Icelandic currency, which allegedly have given rise to high inflation and interest rates at up to 12% for home loans, are reason enough for Icelanders to at least see what the EU is offering in terms of accession.
“We have the smallest currency in the world,” he says.
“With 380,000 people with their own Kroner, this has caused a lot of instability. It has caused high inflation and high interest rates.
“This is what the general public is dealing with: very high interest rates on the mortgages, and also for the small and medium-sized industry, this is a hindrance.
“Geopolitics has played a part in it, of course. We are very close to Greenland, and it’s quite scary to witness the statements that are coming from America these days.
“This has caused us to stop a little bit and think about where we stand.
“Ten years ago, I don’t think anybody imagined Finland joining NATO. Maybe 10 years ago, nobody imagined Iceland joining the EU.
“But things change. We need to explore this opportunity, find out exactly what conditions apply to Iceland’s application. If we get there, we will then be able to make an informed decision about whether we should join or not.”
According to the umbrella No campaign Áfram Ísland, meaning ‘Forward Iceland’, “the Icelandic people are fully capable of moving forward as they face the challenges they face at any given time”.
“A large part of the population believes that Iceland is a land of opportunity and that Iceland’s interests are best served outside the EU.
“Iceland is already a participant in the European Economic Area (EEA), which guarantees access to European markets without Iceland having to relinquish legislative authority or control over its fisheries, agriculture and other resources.
“EU membership would mean that Iceland would become part of a customs union that gives up the possibility of independent trade agreements with other countries. Thousands of regulations and directives would apply in this country, mostly without the [Icelandic Parliament] being able to override them,” the group says.
As things stand, thousands of such regulations already apply in Iceland since it participates in the Single Market, yet without Reykjavík having any say in their evolution or application.
Membership would instead mean Icelandic ministers and MEPs being part of the EU’s co-legislating apparatus.
Such arguments are often not heard in what has been a divisive and extremely tight race.
According to Prof Bergmann, the campaign breaks down on an urban-rural axis, with a strong Yes vote expected in Reykjavík with the No camp enjoying greater rural support (similarly when it comes to levels of higher education).
“There is no difference between men and women, and age distribution is more problematic to determine,” he tells RTÉ News.
“It seems that middle-aged people are most pro-EU, while the opposition is more amongst the oldest and the youngest.”
Undoubtedly, the fishing community is strongly opposed to resuming negotiations, although there has been some public support for the government’s recent decision to reform the so-called fisheries resource levy, a tax on the 30 largest fishing operators which has been in place since 2004.
That change is expected to net an estimated ISK17.30 billion (€123.23m) in 2026, a six billion kroner increase from the existing intact – an indication that there is public disquiet over the wealth of an alleged oligopoly of quota-owning families.
Arnar Atlason, the head of Tor fish processors, acknowledges that the fisheries industry is unsure of its destiny. He believes, on balance, that Iceland should resume negotiations to assess how generous Brussels might be on fisheries exemptions, whatever about the deep concerns of the Irish fishing industry.
“It’s difficult just being small, almost a community, more than a nation,” he says.
“We are just 400,000 people here, and I really think we have to tread carefully, and realise that we live in a volatile world. There is much more at stake than there has been for a long, long time.”
For Gulli Jonasson, a 60-year-old fisherman who has worked on small, inshore vessels and on Russian mega boats during a lifetime on the high seas, there is only one answer.
“It’s very simple,” he told RTÉ News.
“When I was a young boy in school, I was not a good student. But I remember one thing: my teacher told us, ‘in Iceland we are a very rich nation. We have fish surrounding the country. We have a farming industry, power plants, hot water and fresh water.
“We have this all, so we are rich. Why share this with all of Europe? It is very stupid. It is like opening your house for everybody.”
