The increased sanctions efforts of European diplomacy in recent years have established a new perspective on the European Union's external policy toward neighbouring countries, since one of the criteria of the EU's sanctions policy effectiveness is the so-called "regional leadership"—third countries’ alignment with the EU sanctions regimes. The established academic discourse on the topic in Europe evaluates the effectiveness of the sanctions policy on this parameter extremely highly. However, what, in fact, is behind the facade of the postulated successes of regional leadership? In this article, the author asks this question in relation to Iceland, a country that has increased vulnerability in the face of external challenges and which has incurred incomparably high costs from harmonizing its foreign policy with the EU’s anti–Russian sanctions regimes. Using the theoretical and methodological frameworks of shelter theory, this study documents the negative political and economic consequences that Iceland has faced and shows that there are no such categories as consideration and levelling of possible costs for affiliated countries in the goal setting of the EU sanctions policy. In the Icelandic case, this, in turn, leads to a reformatting and polarization of the existing ecosystem of relations in the Euro-Atlantic, since the costs Iceland incurs from harmonization with EU policy are mostly compensated by the United States, although traditionally the US has been responsible for Iceland's military rather than economic protection. The international political situation in the conditions of sanctions sets the stage for possible tensions in Iceland's relations with the EU and a stronger US direction in its multilateral foreign policy. Nevertheless, despite these tensions, Iceland will continue to synchronize with the EU sanctions regimes, as other options are either fraught with even greater costs (synchronization with the US sanctions policy, which is substantially tougher than that of the EU) or unrealizable in the international realities after the start of the special military operation (developing its own sanctions regime).

This article was submitted on 14.04.2024.