Should Iceland join the EU?

Ossur Skarphedinsson

The European Commission has recommended that the EU open membership talks with Iceland, saying that the island already holds many values in common with the EU.

Despite the "opinion" from the EU's executive arm, the approval is needed from EU governments before talks can start.

Seven other countries want to be able to join the EU, but only three have opened formal negotiations - Croatia, Macedonia and Turkey. Croatia is farthest advanced in the process and could join as early as next year.

Correspondents say Iceland could end up jumping the queue - and it hopes to join in 2012. But EU officials say "fast-track" membership is not on offer.

A big hurdle is the lack of a deal so far to repay the Netherlands and UK for huge debts incurred when Iceland's online bank Icesave collapsed in 2008, in which the Icelandic krona lost about half its value in the financial crisis.

The UK and Dutch governments paid out 3.8 billion euros to savers who lost money when Iceland's online bank Icesave went bust.

Almost a quarter of the 323,000 Icelandic population signed a petition against a repayment plan, prompting the country's president, Olaf Ragnar Grimsson, to veto it last month. No deal has been reached yet on a new plan.

Support

What Iceland needs though, is support. Without Dutch and British, Iceland has no chance of joining the EU, the BBC's Dominic Hughes reports.

"Iceland is on the whole well prepared to assume the obligations of membership in most areas," the Commission opinion says.

But in some areas, Iceland will have to make "serious efforts" to conform with EU legislation, it says, including: fisheries; agriculture and rural development; the environment; free movement of capital; financial services and taxation.

The commission says Iceland's government deficit rose to 14.4 percent of gross domestic product (GDP) in 2009, and gross public debt was 130 percent of GDP - way above EU target levels.

Parliment vote

Last July, Iceland's parliament voted to apply to join the EU. In 2008, more than 54 percent of Iceland's imports came from the EU and 76 percent of its exports went to the EU, the commission says.

Iceland is already well integrated with the EU's single market as a member of the European Economic Area (EEA). The EEA, which includes all 27 EU member states, extends EU single market rules to Iceland, Liechtenstein and Norway without them being EU members.

Icelandic Foreign Minister Ossur Skarphedinsson welcomed the EU recommendation, saying: "I appreciate the confidence in Iceland expressed by the EU Commission in this balanced, constructive and broadly speaking very positive report."

Correspondents say Iceland could end up jumping the queue - and it hopes to join in 2012. But EU officials say "fast-track" membership is not on offer.

Jodie Humphries

Jodie Humphries graduated from Bath Spa University with a BA Hons in Creative Writing in 2008. She has worked for GDS Publishing for the digital group since July 2009. She has previous experience with writing for the web, running her own website since April 2007.

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