Business World

Sunday 18 February 2018

Iceland to win backing to start EU entry talks

James G Neuger

European Union governments are set to start membership talks with Iceland, as the North Atlantic island recovers from the financial crisis of 2008, a draft statement said.

EU leaders will decide at a June 17 summit in Brussels “that accession negotiations should be opened,” according to a draft declaration obtained by Bloomberg News. “The pace will depend on Iceland’s progress in meeting the requirements.”

Enthusiasm for the EU in Iceland has soured since it applied to join in July 2009, seeking an economic anchor after the collapse of major banks drove the country into its deepest recession since independence in 1944 and left it dependent on as much as €8.1bn in international loans.

Some 58pc of Icelandic voters favor scrapping the entry bid, with 24pc wanting to press ahead, according to an MMR survey published by the Andriki research institute today.

A group of lawmakers from four out of Iceland’s five political parties, including the junior-coalition Left Green Party, have introduced a proposal to the island’s parliament urging the government to withdraw its EU bid.

Iceland would jump ahead of Turkey and ex-Yugoslav states such as Serbia on the path to joining the world’s largest trading bloc. It could catch up with Croatia, the next in line to join, which aims to become a member in 2012.

Iceland is rebounding from the economic tumult. The economy has grown for two straight quarters, ending a four-quarter slide, and unemployment fell to 8.3pc in May from a peak of 9.3pc in March 2009.

Iceland would need to clear up disputes with EU countries before joining, including a battle over compensating British and Dutch depositors for losses in “Icesave” accounts from the 2008 demise of Landsbanki Islands hf.

Hinting at the Icesave dispute, the draft EU declaration calls Iceland’s enforcement of European financial laws one of the “areas of weakness” that it has to deal with in order to join. The statement may be amended at the summit.

Entry negotiations would start in September or October, with no deadline set for membership.


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