This chapter provides an overview of Iceland's relationship to the European Union and an assessment of the constitutional democratic effects. It also discusses the question of size, including the role of the public administration and focuses on the Iceland's relationship with the US. The chapter considers that both Iceland and Norway are part of the European economic area (EEA) and Schengen agreements, the implications for Iceland and Norway seem to be similar in terms of autonomy and accountability. There are also differences: Iceland's smallness, special domestic features and unique relationship to the US have had special consequences in Iceland. The chapter further deals with the legacy of another dominant actor, the US, in Iceland and its implications for the country's engagement with the European project. Iceland's current engagement with the European project has strengthened the public administration, limited political patronage in many sectors and led to somewhat closer cooperation between the government and the labour market organisations.