This year, the Icelandic Parliament, Althingi, has decided to put the following question to a referendum to be held on 29 August 2026: “Should negotiations on Iceland’s accession to the European Union be continued?”. As an EEA (European Economic Area) EFTA (European Free Trade Association) State, Iceland is already deeply integrated into the EU internal market, while remaining outside certain key EU policy areas. Besides Economic and Monetary Union, the debate is increasingly turning to participation in other EU policy areas not covered by the EEA Agreement, particularly in security and defence. As the referendum approaches, the question of what added value EU membership would bring to Iceland takes centre stage. One key dimension of this question concerns what EU accession would mean for Iceland’s involvement in EU agencies.
EU agencies have been expanding their reach beyond the EU itself by providing frameworks for participation and cooperation with third countries. This has created a layered system of integration in which non-EU states may (already) participate extensively in EU governance structures without formally being EU members. Against the backdrop of renewed debate on Iceland’s relationship with the EU and the possibility of reopening the accession negotiations abandoned in 2015, the Icelandic case offers a particularly interesting example of what EU membership could add to Iceland’s existing involvement in EU agencies through the EEA.
The aim of this blogpost is to examine how Iceland currently engages with EU agencies and what might change in this regard after EU membership.
1. From EEA Participation to EU Membership?
Iceland’s relationship with the EU has evolved gradually from trade cooperation to deep integration with the EU’s internal market. Following the conclusion of a free trade agreement with the European Communities in 1972, Iceland joined the EFTA and became part of the EEA in 1994. Through the EEA Agreement, Iceland participates extensively in the EU internal market, benefiting from the free movement of goods, services, capital and persons. However, it is excluded from certain EU policy areas. Moreover, under the EEA’s two-pillar structure, Iceland incorporates relevant EU internal market legislation into domestic law, yet it does not participate in EU decision-making institutions or hold voting rights. Compliance and judicial oversight in the EFTA pillar are ensured via the EFTA Surveillance Authority and the EFTA Court, which mirror certain functions of the European Commission and the Court of Justice of the European Union in the EU pillar.
Iceland’s attitude towards EU membership has been influenced by the aftermath of the Great Financial Crisis in 2008. Its application for accession, submitted on 17 July 2009, was narrowly approved by the Althingi, resulting in negotiations that began in 2010 but were suspended in 2013. On 12 March 2015, Iceland’s government requested that “Iceland should not be regarded as a candidate country for EU membership”, partly due to Iceland’s success in the Icesave case before the EFTA Court, which boosted confidence in the EEA EFTA framework relative to the CJEU’s judicial system.
Rising costs, the war in Ukraine and concerns over US imperialism have added new dimensions to the debate over what EU membership could offer Iceland, including in terms of greater European solidarity, security and political influence.
Engagement with EU agencies is not, in itself, a novel element in that debate. Indeed, Iceland already maintains long-standing ties with a range of EU agencies. Thus, the question is not whether Iceland would engage with EU agencies, but how EU accession might reshape that engagement. To assess what EU membership might change in terms of participation in EU agencies, this blogpost proceeds in three steps: first, it sets out a typology distinguishing between different models of third-country involvement in EU agencies (section 2). Iceland’s current engagement with EU agencies is then mapped against this typology, highlighting its already extensive involvement in EU agencies linked to the internal market through the EEA Agreement (section 3). Finally, the question how EU accession might transform Iceland’s relation with EU agencies is addressed (section 4). The post concludes with some reflections on what the Icelandic case reveals about the place of EU agencies in the evolving architecture of European integration (section 5).
2. Who Gets Access to EU Agencies? A Typology of Third-Country Involvement in EU Agencies
To understand third-country access to EU agencies, it is useful to distinguish between three levels of involvement: membership, participation and cooperation.
The most integrated level is membership, which is solely reserved for the 27 EU Member States. This includes full participation in the agency’s governance structures and voting rights. However, even within the EU, membership is not always uniform. Some agencies operate in areas of differentiated integration, where participation depends on involvement in a specific EU policy rather than EU membership alone. The Single Resolution Board, for instance, is linked to Banking Union membership and consequently comprises only Euro Area Member States and other participating States.
The second most integrated level is participation. The regulations of several agencies state that participation in the agency’s work “shall be open” to third countries that have concluded agreements with the EU and adopted relevant EU legislation. This is particularly important for the EEA and EFTA States – Iceland, Liechtenstein and Norway – as they systematically apply large parts of the EU’s internal market legislation through the EEA Agreement. This gives them structured access to several EU agencies connected to the internal market. However, participation does not give third countries the same rights as Member States, as voting rights and final decision-making powers remain the preserve of EU Member States.
Finally, agencies may cooperate with third countries. Unlike participation, which is “open” to eligible States in some cases, cooperation is much more flexible: agencies “may cooperate” with third countries through memoranda of understanding, working arrangements, regulatory dialogue or supervisory exchanges. As these forms of cooperation often depend on equivalence assessments or political discretion, they tend to be more limited, conditional and legally unstable than participation based on formal agreements with the EU.
3. Iceland and EU Agencies Today
Among non-EU countries, the EEA EFTA States, including Iceland, enjoy the most extensive and institutionalised access to EU agencies due to their participation in the internal market. Under the EEA framework, Iceland participates in the governing bodies of 19 decentralised agencies with “the same rights and obligations as EU Member States, except for the right to vote”. This mainly involves agencies that are central to the functioning of the internal market.
Broadly speaking, four approaches to participation in EU agencies can be distinguished. The first is the national implementation model, in which binding decisions adopted at the EU level are implemented by national authorities in the EEA EFTA States. This model preserves the traditional two-pillar structure of the EEA by ensuring national implementation stays with national authorities within the EFTA pillar and applies, for example, to the European Chemicals Agency (ECHA) (Annex 1. (g) EEA Joint Committee Decision) and its Icelandic counterpart, the Environment Agency of Iceland (Umhverfisstofnun).
The second model gives powers to the EFTA Surveillance Authority that mirror those exercised by an EU agency within the EU pillar. The EFTA Surveillance Authority then addresses decisions to national authorities in the EEA EFTA States, which subsequently implement them domestically. This approach is used, among others, in relation to the Agency for the Cooperation of Energy Regulators (ACER) (Article 1 (b) (i) EEA Joint Committee Decision), although with no tangible impact due to Iceland’s geographical isolation
A third and more far-reaching model also empowers the EFTA Surveillance Authority to adopt decisions directly addressed to private parties within the EEA EFTA States. In the field of financial supervision, the European Supervisory Authorities prepare draft decisions that are subsequently adopted by the EFTA Surveillance Authority, which may issue binding decisions directly addressed to private parties in the EEA EFTA States, including banks and credit rating agencies (Recitals (3)-(5) and Article 1 (g) EEA Joint Committee Decision). In certain cases, the EFTA Surveillance Authority may therefore adopt decisions directly affecting individuals and businesses without the involvement of the Icelandic Central Bank as national supervisory authority.
Finally, the assimilation model extends the powers of EU agencies themselves into the EFTA pillar. Under this approach, EEA EFTA States, in particular Iceland with the Data Protection Authority (Persónuvernd), are integrated almost fully into the EU regulatory structure despite remaining formally outside the Union. This model is used, for example, in the European Data Protection Board (EDPB) framework and is politically sensitive because it stretches the traditional two-pillar structure of the EEA Agreement (see declaration at the end of the EEA Joint Committee Decision).
4. What Could Possibly Change for Iceland?
EU membership would transform Iceland’s status from a participating outsider to a fully participating insider within EU agencies. In areas already covered by the EEA Agreement, Iceland would gain voting rights and equal representation within agencies’ decision-making structures, thus strengthening the accountability and democratic legitimacy of supranational decisions impacting Icelandic citizens.
In addition, membership could extend participation to agencies and policy fields that are currently outside the EEA framework. The most politically sensitive areas are likely to remain fisheries and agriculture. These were among the most difficult chapters in Iceland’s previous accession negotiations due to concerns over sovereignty and control of natural resources. This is reflected in the agency landscape: Iceland already participates in bodies linked to the internal market dimension of these sectors, such as the European Food Safety Authority (EFSA) and the European Maritime Safety Agency (EMSA). However, it does not participate in agencies directly connected to the Common Fisheries Policy and agricultural governance, such as the European Fisheries Control Agency (EFCA) and the Community Plant Variety Office (CPVO). EU membership would give Iceland an equal say in these agency structures and decision-making processes thus potentially alleviating concerns over sovereignty and control of natural resources.
Beyond fisheries and agriculture, Iceland currently remains outside several agencies linked to other politically sensitive EU policy areas. These include bodies connected to justice and home affairs, such as Europol, Eurojust, the European Union Agency for Asylum (EUAA) and the European Union Agency for the Operational Management of Large-Scale IT Systems (EU-LISA), as well as agencies linked to monetary integration and the Banking Union. While Iceland already cooperates with some of these bodies through the Schengen association, working arrangements, or memoranda of understanding, EU accession negotiations could transform this limited cooperation into full membership, although some transitional arrangements could apply.
One particularly interesting question concerns defence cooperation. In line with its traditional security stance as a NATO member without a standing army, Iceland currently remains outside the European Defence Agency (EDA), an EU body outside the category of decentralised agencies. However, security and defence partnership has recently become a key topic in the Icelandic EU debate, seen by some as a potential incentive for closer integration. In a Europe marked by growing security concerns, participation in joint defence planning is increasingly considered a strategic advantage of EU membership rather than a threat to sovereignty.
5. Conclusion
The Icelandic case exemplifies a broader trend in European integration. EU agencies are no longer merely technical bodies responsible for implementing sector-specific legislation. Rather, they are increasingly becoming the institutional framework through which participation in the Union’s regulatory and supervisory system is organised. For EEA EFTA States, participation in agencies has enabled a high degree of regulatory integration without EU membership, while also exposing the limits of this model. Although Iceland participates extensively in the day-to-day operation of the internal market, its influence over the development of the associated framework is limited by its lack of formal decision-making rights. The renewed debate on Iceland’s relationship with the EU therefore concerns not only market access and political integration, but also Iceland’s role within an increasingly agency-based system of European governance. In this respect, the distinction between participation and membership is no longer merely a question of substance: it has become a question of influence within the evolving architecture of European integration.
Research for this blogpost was conducted as part of EUCHALLENGES, a Jean Monnet Centre of Excellence co-funded by the European Commission under grant agreement no. 101127539.
This blogpost is partially based on a chapter in a forthcoming book J. Bauerschmidt, R. D’Ambrosio, D. Fromage, A. Schirk (Eds.) The Anti-Money Laundering Authority and EU Financial Agencies (Oxford University Press).
Vanessa Aichstill is a PhD candidate and a teaching and research assistant specialising in EU law at the University of Salzburg, where she is affiliated with the Salzburg Centre of European Union Studies. She studied law at the University of Economics and Business in Vienna, obtaining an LL.M. in Business Law. During her PhD, she undertook traineeships at the Austrian Financial Market Authority and the EFTA Court. With a focus on the EBA, ECB (within the SSM) and SRB, she is a member of both the Young Researchers’ Interdisciplinary Hub on EU Agencies (YRIA) and the EBI Young Researchers’ Group. Her research focuses on EU integration and the Economic and Monetary Union, specifically the Banking Union and its external dimension.