On July 16, Iceland applied to join the European Union, 19 years to the day after Malta lodged its application in 1990. The application followed an intense debate in the Icelandic Parliament, the Althingi, and a vote that passed with a slim majority.
For decades, EU membership was a non-issue in Iceland because it had a very successful economy where growth seemed limitless and living standards were among the highest in the world. That was taken as proof that the Icelandic go-it-alone model worked best.
But it did not.
Last year, the international financial crisis struck and it brought the country to its knees. The Icelandic Kroner's value collapsed and a majority of Icelanders started pounding on the EU's door to let them in. Some Icelandic political leaders also toyed with the idea of unilaterally introducing the euro to replace the country's currency. The EU warned them to banish such thoughts.
Iceland's case raises a lot of interest in Malta, largely because, as a small island-state on Europe's northern periphery, it shares some "similarities" with Malta. Iceland's population may be smaller than Malta's but its territory is more than 300 times the size of the Maltese islands. It has been said that since Iceland is already so deeply integrated with the EU after 15 years of membership of the European Economic Area (EEA), its application will be unproblematic and its membership fast-tracked.
This assumes that everything works according to plan, which is not often the case in politics.
The European Commission will now prepare a report (avis) on Iceland's eligibility to join. This will go to Council where the 27 member states will have to agree unanimously whether to open membership negotiations. The negotiations may prove tricky. For instance, fishing in Iceland's exclusive fishing zone may become the reef on which they get stuck.
The other reef is the guarantee that the Icelandic authorities have been asked to give to Britain and the Netherlands to cover foreign depositors' claims on Iceland's failed banks.
Iceland's internal politics and the mood of its citizens are also relevant. Icelandic society is split down the middle, although support for membership now seems to be bigger than opposition to it. The vote in the Althingi reflected this division: 33 voted in favour of the application, 28 against and two abstained.
If the negotiations are eventually concluded, the whole package has to be approved by Icelanders in a referendum. And the outcome is not a foregone conclusion.
This sounds all too familiar in Malta with our pattern of politics and the brinkmanship that goes with it.
Iceland's application raises an important issue that is well worth reflecting on, namely: How can small states protect themselves against unexpected shocks from the rest of the world? Or, to put it simply: Can small states survive alone?
Since small states tend to have very open economies relying more heavily on trade and foreign direct investment, the impact of international turbulence on them is usually bigger. Add to these other challenges, such as global warming, immigration, terrorism, pandemics and natural disasters, and one immediately sees how important it is for small states to constantly store for the proverbial "rainy day". They also need strong and reliable friends that can help them in time of need.
The EU offers precisely this kind of peace of mind to its small member states. Indeed, when Iceland was struck down by the world financial crisis, it sought shelter in the EU. But gates cannot open fast enough in times of emergency. That is when the costs of being out of Noah's ark start to weigh heavily.
History has shown Malta's choice of EU membership to have been the better policy. We can count on the benefits and the protection that come with being part of the club. For, notwithstanding its many imperfections, the EU has succeeded in delivering prosperity to its member states and got them to show solidarity with one another and work together to overcome common threats and crises.
The EU provides another valuable advantage.
In this recession, the eurozone has emerged as an area of relative stability in a turbulent sea. This is not to say that the eurozone economies were untouched by the global recession. But the eurozone has shown more resilience and it may therefore help its members recover more quickly. And, of course, unlike the Icelandic Kroner, the euro did not become useless paper when the crisis struck.
Icelanders need to ponder on these issues carefully. Perfect choices are rare in life and the EU is not one of them. But some choices are better than others. EU membership offers small states a better deal.
Which leaves just one point.
Small countries need political leaders who can be relied upon for a sound political judgment. They cannot afford to get it wrong. Thankfully, we were lucky to get it right.
Ask Your Mep on www.simonbusuttil.eu.
Dr Busuttil is a Nationalist member of the European Parliament.