Iceland on Wednesday won formal backing from the European commission to open negotiations to join the EU, a green light for Reykjavik to moving the country toward membership.
European governments will still need to decide whether to support the EU aim. Some regard Iceland as a huge asset for the union and as Europe’s gateway to the Arctic, giving the EU a foothold in any future contest for the expected mineral and economic bonanza in the far north.
Iceland’s membership chances are clouded, however, by its dispute with the UK and the Netherlands over billions in lost savings when the country’s oversized banks collapsed in 2008.
“We fully support an Icelandic application to join the EU,” said a British government spokesperson, but added: “It’s essential they meet their international obligations under the deposit guarantee scheme.”
The British and Dutch governments compensated their savers to the tune of almost £4 billion (US$6.1 billion) when Iceland’s online Icesave bank collapsed. Negotiations aimed at getting Iceland to pay back the money are at a stalemate and the government in Reykjavik could fall if, as expected, it loses a referendum next week on the Icesave issue.
If, however, European leaders agree at a summit next month to open membership talks, Iceland could race ahead to become the 28th or 29th EU state.
Stefan Fuele, the European commissioner for enlargement, indicated that the negotiations could be wound up within 14 months because Iceland has long been part of the European economic area and already applies much EU law and regulation.
“I don’t see any dramatic problem,” Fuele said. “I hope today’s opinion boosts Iceland’s aspirations to join the EU. It will make [the EU] stronger.”
Despite the banking dispute, many leaders across Europe want to see Iceland in the union because of its strategic value and location in the north Atlantic.
“There [has been] a lot of discussion recently of the strategic importance of the Arctic area. This is where Iceland could be very useful,” Fuele said.
Foreign policy analysts have long predicted a contest between the US, Russia, Canada and Scandinavia for control of the mineral wealth and shipping lanes of the far north as global warming makes the frozen wastes more accessible.
“The EU is virtually absent from this big play,” said Carl Bildt, Sweden’s foreign minister. “Iceland will bring us more into Arctic issues that will be big.”
Iceland’s population is about 306,000, representing about 0.06 percent of the EU population, and produced 0.08 percent of the EU’s economic output. However, the country is seen as a disproportionately large prize in geopolitical terms.
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