The government of Iceland plans to submit an application to join the European Union following a vote in the country's parliament late on Wednesday (15 July).
The 63-member parliament was forecast to approve the government's plan by a slim majority, despite opposition from the centre-right Independence Party, as well as from within the ruling left-leaning coalition.
A spokesperson said that the government intended to submit the formal application at or before a meeting of EU foreign ministers in Brussels on 27 July. Ambassadors of the EU's 27 member states are now likely to consider the question next Thursday (23 July).
EU officials suggested that membership talks could progress more quickly than with the current candidates, although Iceland will have to go through the same steps.
Iceland is a member of the European Economic Area (EEA), which gives members of the European Free Trade Association – except Switzerland – access to the European single market. The country has implemented around two-thirds of EU law.
But diplomats and European Commission officials predicted tough negotiations on fisheries, a sector that is not covered by the EEA.
Icelandic fishermen are resistant to any opening of the island's waters to Spanish and French trawlers.
Opposition
The Independence Party, swept from power by the collapse of Iceland's financial sector last year, opposes EU membership, as do members of the Left Greens, part of the ruling left-wing coalition of Prime Minister Jóhanna Sigurðardóttir, which has been in office since April.
A main point of contention during the parliamentary debate was whether to hold two referenda, on the submission of a membership application as well as on the actual entry. The government proposes to hold a single popular referendum, on accession.
A bigger challenge in the short term could be an agreement to reimburse Dutch and British account holders with Icesave, the offshore division of Landsbanki, which collapsed last October.
In November, the government assumed legal responsibility for repaying deposits after EU member states delayed a loan by the International Monetary Fund that was designed to stave off the country's financial collapse.
Under the agreement, the UK and the Netherlands are to provide a loan of around 45% of Iceland's gross domestic product to finance the reimbursement, placing a heavy burden on Iceland's public purse.
Iceland's parliament now has to approve the scheme, and domestic criticism of the deal suggests that the government may have to resort to making this a vote of confidence.
