Iceland is already in the EEA and Schengen. The only upside I have read about would be access to adopting the Euro which has a lower inflation rate than the ISK.
The main downside and likely what steered the vote to no are conflicts with Iceland's fishing industry x EU regulations and becoming more vulnerable to foreign ownership and fishing rights.
Fishing represents 40% of Iceland's total exports according to Wikipedia.
My guess is most voters in Reykjavik have near zero exposure to fishing as an industry.
The main downside and likely what steered the vote to no are conflicts with Iceland's fishing industry x EU regulations and becoming more vulnerable to foreign ownership and fishing rights.
Fishing represents 40% of Iceland's total exports according to Wikipedia.
My guess is most voters in Reykjavik have near zero exposure to fishing as an industry.