Iceland says ‘no’ to the EU. Has Europe fallen out of favour?

Brussels. As the European Union returns from its summer break in 2026, it enters an election year from which it could emerge very different indeed. Next spring’s presidential elections in France could cause the European project to implode, bringing Marine Le Pen – leader of the anti-European far right and an admirer of Vladimir Putin – to the Élysée Palace. But the French election is not the only vote with the potential to destabilise the EU. Three other major countries are preparing for elections in 2027: Italy, Spain and Poland. The electoral calendar for the next 18 months is much more extensive: Sweden on 13 September, Latvia in October, Estonia in March, Finland in April, Greece by July, and Slovakia by September 2027. Added to this is a long series of regional elections in Germany, where polls in a single federal state can influence the federal government’s decisions in Brussels. By the end of 2027, will the EU still be standing? Will it still be the same?

The first election of the ‘rentrée’ did not go well for the EU. In Iceland, in Saturday’s referendum, voters rejected the proposal to resume accession negotiations. The ‘no’ vote won with 52.8 per cent of the vote, compared with 47.2 per cent for the ‘yes’ vote. This is a severe blow to the EU’s current narrative regarding its ability to attract neighbouring countries by offering an island of political stability, economic predictability and legal certainty in the era of Donald Trump and Vladimir Putin. The Icelandic government, which was in favour of reopening negotiations, had called the referendum in the wake of Trump’s threats to annex Greenland. But for the majority of Icelandic voters, the fear of losing control over fishing rights outweighed their fear of Trump.

The election in France is clearly the one causing the most concern amongst EU institutions. Officials are struggling to hide their pessimism. The polls show an alarming trend. In the first round, none of the potential candidates from pro-European parties is managing to stand out. A second round between the candidates from the two extremes – Marine Le Pen and Jean-Luc Mélenchon – cannot be ruled out. In the second round, Le Pen is leading against all the other candidates. The election campaign began with a surreal debate – instigated by Mélenchon and the businessman Matthieu Pigasse – on the cancellation of public debt held by the Bank of France, which had one result: compared to far-left populism, Le Pen appears moderate. But her programme for the EU is no less disruptive: halving France’s financial contribution to the EU budget, withdrawing from Schengen, ending support for Ukraine, and calling into question the EU’s legal order. The President of the Commission, Ursula von der Leyen, harbours one hope should the far-right leader win in France: that Marine Le Pen will adopt the same tactics as Giorgia Meloni in Italy, taking a pragmatic and moderate approach towards the EU. 

Even the German Chancellor, Friedrich Merz, wants to wait and see not only the results of the presidential election, but also what Le Pen will do if she is elected. Yet, if words carry any weight, the underlying message is clear. The EU “is a mercantile and ultra-liberal empire”, said Le Pen in 2025: “It is an empire against our nations. It is an empire that manipulates and threatens chaos, imposes its will and oppresses”.

In Rome, questions are being asked about the direction Giorgia Meloni will take, as she faces a challenge from the far right by a pro-Russian general, Roberto Vannacci, whose new party is polling at almost 10 per cent. By choosing to exploit the Ceuta crisis and pick a fight with the Spanish socialist, Pedro Sánchez, the Italian Prime Minister has already signalled that she is prepared to adopt a more radical stance. In Brussels, Meloni has been praised for her pragmatism. But even in Brussels, questions are being asked – this time about the influence that Le Pen’s election might have on the Italian Prime Minister. Meloni’s support for Ukraine has been strong in words, but much weaker in terms of financial aid, arms supplies and sanctions against Russia. The PNRR funds will no longer be available, freeing the Italian government from their constraints – including political ones.

In Spain, Sánchez is pushing his political resilience to the limit. The economy is doing well. But corruption scandals have multiplied, coming dangerously close to the Prime Minister. The handling of the Ceuta crisis has been exploited by the right and the far right. Sánchez’s allies on the far left have been weakened. His Socialist Party is failing to make up ground in the polls. The elections, due to be held by August next year, could bring to power a coalition between the Partido Popular and Vox, allowing yet another anti-European far-right party to form a government within the EU.

In Poland, the return of PiS – in alliance with two other, even more radical far-right parties – is on the horizon ahead of the election due to be held by November 2027. The conservative, pro-European Prime Minister, Donald Tusk, is finding it increasingly difficult to justify support for Ukraine, at a time when populists are exploiting historical conflicts to rekindle anti-Ukrainian sentiment amongst Poles.

The Ceuta crisis has highlighted the lack of solidarity amongst the current leaders of the Member States and cast doubt on that of the EU. Twenty-two heads of state and government have signed a letter criticising Sánchez, initiated by Giorgia Meloni and the Danish Prime Minister, Mette Frederiksen. Ursula von der Leyen waited until the majority of migrants had been returned to Morocco before expressing her solidarity with Spain in a post. Some national leaders are ready to exploit their counterparts’ difficulties in an attempt to bolster their domestic support. The current climate does not bode well for the many challenges facing the EU in the coming months.

From a strictly institutional perspective, the main challenge is the adoption of the New Multiannual Financial Framework (the EU’s 2028–34 budget). Unanimous agreement is required, but no one seems willing to compromise. The group of ‘frugal’ countries – which met in Berlin on Thursday 27 August – said it was demanding a cut of ‘several hundred billion’ compared with the Commission’s proposal (€1,800 billion). The level of each Member State’s financial contribution to the EU will be used by populists during election campaigns to challenge the incumbent governments. If the President of the European Council, António Costa, fails to reach an agreement by December, some officials believe it will be impossible to achieve unanimity during a year of full-scale election campaigns in four major countries.

Donald Trump continues to pose an external threat. Despite the Turnberry agreement, the US president has launched a series of investigations that could lead to new tariffs against the EU. China is the main economic threat, at a time when Europeans are hesitating over the level of protection for their industries and the reforms needed to boost competitiveness. But Russia is the most dangerous external threat. Several Western intelligence services have concluded that Putin could carry out a limited kinetic attack against a NATO country to test the Alliance’s resolve. Acts of sabotage are on the rise. It may be enough for Putin simply to stoke fears of war to swing decisive votes towards his allies in the EU.