This is a fair question and an understandable concern. The answer depends on what influence we actually have today and what would change with membership.
The situation today: rules without a vote
Through the EEA Agreement, we adopt nearly all of the EU's internal market rules — corresponding to about three-quarters of all EU legislation that directly affects domestic law — rules covering labour markets, food safety, environmental protection, consumer rights, and financial markets, to name a few. We're supposed to have "shaping influence" on this legislation, but we have no voting rights. In practice, Icelandic officials sit on expert committees at early stages and present viewpoints, but when it comes to the actual vote, they have to leave the room. The legislation is then adopted and we implement it.
This arrangement has often been called "fax democracy" — we receive the rules and implement them, but have no part in their final shaping.
What would we gain?
Inside the EU, we'd gain full participation in decision-making. We'd get the same number of votes in the Council of Ministers and the European Commission as, say, Germany, plus a veto on key decisions. In the European Parliament we'd hold 6 of 720 seats.
Small states have proportionally far more weight in the EU system than their size would suggest. In the Council of Ministers, where the most important decisions are made, small countries like Luxembourg and Malta have real influence on outcomes and wield their votes fiercely to defend their interests.
The Nordic countries can also be expected to cooperate closely within EU institutions, which further increases their collective weight.
Instead of receiving the rules ready-made, we'd take part in writing them.
Does shared decision-making mean lost sovereignty?
This is the crux of the matter. Membership means that some decisions are made jointly with other nations rather than unilaterally. But our current situation doesn't amount to full independence either — it comes down to following other people's decisions.
Iceland has, in theory, the right to veto new EU acts incorporated into the EEA Agreement. In practice, this right has almost never been used, because the consequences — that the relevant part of the agreement would be suspended — are considered too serious for Icelandic business and industry.
Sovereignty is not merely a formal right to say no on paper. It is also real power to influence your own environment.
In short: Today we follow rules that others set. Inside the EU, we'd take part in setting them. Whether one considers that more or less sovereignty depends entirely on what one values more: real influence at the negotiating table, or a formal veto right that is almost never used.
Sources and further reading:
- The EEA Agreement, Art. 99–101 — on information, consultation, and EFTA states' shaping influence on EU legislation.
- Treaty on European Union (TEU) — Art. 14 (European Parliament) and Art. 16 (Council of Ministers and voting procedures).
- Ministry for Foreign Affairs: report of the EEA working group (2019) — detailed analysis of Iceland's participation and the EEA Agreement's impact on governance.
- Government of Iceland: EEA affairs — information on the implementation of the EEA Agreement and relations with the EU.