Long before Brexit came Greenlandexit — and a corresponding boost to Greenland’s economy

In 2015, Greenlandic prime minister Kim Kielsen signed a new declaration over EU relations.
In 2015, Greenlandic prime minister Kim Kielsen signed a new declaration over EU relations.

The year was 1985.European_UnionUnited Kingdom Flag Icongreenland flag

Germany was still divided into east and west, and Portugal, Spain, Austria and Sweden were all still outside the European Economic Community, the forerunner to today’s European Union.

But it marked the first — and, so far, the only — time that any territory voluntarily exited the European Union.

It was Greenland, then and today an autonomous country within the kingdom of Denmark. In the 1980s, Greenland was fresh off winning a new layer of home rule in 1979 from the Danes. Angry about the fact that its own local fisheries were forced to compete with more industrial fishing outfits from the European Union, Greenlanders voted to leave the European Economic Community, many of them noting that Greenland is closer, in geographic terms, to the North American continent than to Europe.

In the intervening years, of course, several rounds of treaties have refined the European Union’s structure, including the Treaty of Lisbon, which for the first time introduced in Article 50 a legal mechanism for a member-state’s exit from the European Union that establishes a two-year framework for negotiation from the moment of withdrawal notification to final exit.

Greenland, however, set the only real-world precedent that British voters and policymakers have if, indeed, the country decides to leave the European Union in the June 23 referendum.

Flush off the excitement from winning a modicum of self-government from Denmark nearly 3,500 miles away, the eurosceptic, left-wing and outright separatist  Siumut (Forward) soon won the first local elections after the introduction of home rule. Among other things, Greenland’s prime minister Jonathan Motzfeldt scheduled a referendum for February 23, 1982, in which Greenlandic voters would be asked whether the country should continue to be a member of the European Economic Community after becoming a member, nearly by default, when Denmark acceded in 1973.

The referendum was close — out of 23,795 voters, 53.02% voted to leave and 46.98% voted to remain.

By far, the key issue for Greenland’s electorate was fishing rights — incidentally, this is one of the reasons why both Iceland and Norway have so far resisted formal EU membership. With plentiful stocks of fish off Greenland’s sprawling coasts, those fishing waters were subject to competition from the rest of Europe so long as Greenland was part of the single market.

By the time that Greenland left the European Economic Community in 1985, it had negotiated a formal accord — the ‘Greenland Treaty’ with European leaders that restored control over its fishing waters; as part of the fisheries agreement between the two countries, Europeans kept a limited set of fishing rights with respect to Greenland, while Greenland won access to the European single market without additional tariffs for its fishing products.

‘Remain’ proponents in the British referendum in 2016 will note that, even though Greenland’s exit was a much simpler proposition, politically and economically, above all at a time when the body of European law was much lighter, it still took three years from the date of the referendum to negotiate a final exit. It’s credible that a British exit could take more than two years, given that the Article 50 infrastructure has never been tested and the list of issues for a British EU divorce would be much longer. UK-EU trade encompasses much more than fishing products, and any number of difficulties could emerge, over the rights of British expats living in the European Union, over the ‘passporting’ rights that could be vital to London and the British financial industry, over the status of borders between Northern Ireland and Ireland and a successor to the ‘Good Friday’ agreement.

Nevertheless, the final arrangement worked well for both Europe and for Greenland, considering that nearly 90% of Greenland’s exports relate to the fishing industry and that nearly 90% of Greenland’s exports wind up in the European market. Through Greenland’s ongoing status as a territory of Denmark, it is eligible to receive at least some developmental funds from the European Union that it might not otherwise receive. Relations have nevertheless been strained at times over the years. An EU-wide seal fur ban introduced in 2009 angered many Greenlandic residents, though it contains an exception for seal products from Inuit communities. In 2015, the European Union, Denmark and Greenland signed a new joint declaration, updating their mutual understanding about Greenlandic-EU relations, including environmental issues.

For what it’s worth, GDP growth leaped from 3.5% in 1985 to 7.1% in 1986, the year after Greenland’s exit, and growth remained between 5.5% and 6.7% for the next three years until a sharp recession hit in 1990 as the cod industry collapsed and an important lead and zinc mine closed). While Greenland’s fisheries may have enjoyed a brief ‘boom’ following its exit from the EEC, it’s also true that continued membership might have offered the territory a path to greater development. There’s a narrative here for both the ‘Remain’ and ‘Leave’ camps. Given that the British economy is so much larger (the world’s fifth-largest economy) and so much more diversified, there are obvious limitations to the Greenland precedent.

But even if the United Kingdom decides to leave the European Union later this week, the Greenland example also shows that the EU debate will not necessarily end with the country’s exit. Many Greenlanders continue to believe that the territory never should have left the European Union and that, indeed, it should consider rejoining, despite growing interest from China (and elsewhere) in the potential for gold, oil and other resources in the Arctic region. Moreover, if negotiators finalize the Trans-Atlantic Trade and Investment Partnership, a free trade agreement between the United States and the European Union, Greenland’s access to the EU market could be diluted.

Kim Kielsen, who has been prime minister since 2014, isn’t among those who want EU membership and, true to his heritage as the leader of Siumut, he would prefer Greenland’s eventual independence. But in the decades ahead, if the hype around a potential Arctic commodities boom fades, EU membership (as an independent country or under Danish sovereignty) will continue to be an option for potential debate.

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