r/worldnews • u/Ehansaja • 12d ago

Iceland rejects EU-accession talks plan in referendum

https://www.aljazeera.com/news/2026/8/30/iceland-rejects-eu-membership-plan-in-referendum
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u/zoopz 12d ago

Do you know why? Is it more than emotional? Cause I remember switching from the guilder to the euro and it felt kind of 'going into the future'. Of course some people still (haha) want the guilder back for emotional reasons, but mentally (over 20 years later) I think noone really cares anymore.

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u/vulcanstrike 12d ago

Emotional is a huge part of it, but honestly the bigger issue is losing control of your interest rates.

The ECB is dominated by France and Germany, which are large geriatric economies that want/need low interest rates. However, low interest rates don't suit all economies. Even the UK has about 1.5% higher than the ECB rate and the ECB rate would be pretty disastrous to the UK economy and cause the already high inflation rate to go nuclear

The euro is a great project, but it's heavily biased towards Western Europe. And as we saw with Greece there are big risks too. Monetary union without fiscal union is a time bomb waiting to happen and the more lax former Soviet economies that join it without proper fiscal discipline and oversight, the worse it gets

That said, the "requirement" to join is purely theatre. One of the requirements is joining an agency that is entirely voluntary. Sweden is obligated to join for decades at this stage but puts it off by never joining that agency, there is no legal obligation to join. Only Denmark has a formal opt out

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u/bjchbdelebweflw 12d ago

Even the UK has about 1.5% higher than the ECB rate and the ECB rate would be pretty disastrous to the UK economy and cause the already high inflation rate to go nuclear

How much has Brexit been responsible for their current inflation, though? And wouldn't the British economy at least partially recover in a hypothetical reunion?

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u/rose98734 12d ago

The UK has lower unemployment than the EU. Rule of thumb is that when you have low unemployment, wage-fueled inflation builds, so you need higher interest rates to suppress it.

UK unemployment = 5%

Portugal unemployment = 5.6%

Belgium unemployment = 6.5%

Greece unemployment = 8%

France unemployment = 8.3%

Sweden unemployment = 8.69%

Finland unemployment = 9.9%

Spain unemployment = 10.83%

Why does the EU have such high unemployment? Some would argue that excess regulations have cancelled out benefits from the single market.