THE EUROPEAN Commission has called on EU leaders to open accession talks with Iceland, days ahead of a key referendum in that country on a controversial deal to repay €3.8 billion to Britain and the Netherlands for deposits lost in Iceland’s banking meltdown.
Although the EU executive’s decision could open a path for Reykjavik to join the union around the same time as Croatia in 2012, contentious questions remain to be resolved around the opening of Iceland’s valuable fishing waters to European competitors.
However, allowing Iceland into the EU could also open mineral-rich and contested areas of the Arctic to EU influence. Enlargement commissioner Stefan Fule said Iceland could be “extremely helpful” in that regard.
Mr Fule insisted yesterday that the Icesave deposit compensation scheme, which comes before a referendum on Saturday week, was strictly a bilateral matter between Iceland and Britain and the Netherlands. He noted, however, that Iceland would have to be bound by EU rules on the free flow of capital and financial services.
Although Iceland’s membership application does not rest on the Icesave scheme, diplomatic and other sources say the matter will have to be resolved if accession talks are to make headway.
Addressing reporters in Brussels, Mr Fule said he did not foresee any “dramatic problems” that would not be resolved.
By tradition stolidly independent, Iceland applied for EU membership in the aftermath of an economic collapse in 2008 that saw it lean on its Nordic neighbours for emergency loans.
Membership is seen as a prelude to joining the euro as a means of securing long-term stability. However, recent polls suggest the Icelandic people are divided on the merits of joining.
Two-thirds of the statute book in Iceland is already in line with EU law, making the accession process simpler. However, Mr Fule said there would be no short-cut to EU membership.
While stating that “serious efforts” were required to resolve questions around the country’s fisheries, Mr Fule’s report on Iceland’s application said the procedure for judicial appointments was a matter for concern.
The report also raised questions about “possible conflicts of interest in Iceland’s public life, such as close links between the political class and the business community, especially in light of the country’s small population and isolated location”.
Against the backdrop of investigations into the country’s financial collapse, it said mechanisms should be strengthened to reduce scope for conflicts of interest.