Global General

Iceland starts EU entry talks

(Agencies)
Updated: 2010-07-28 04:29

BRUSSELS - Iceland began talks to join the European Union on Tuesday despite wariness about the costs involved in membership, including giving up its whaling traditions and paying off billions of euros of debts.

Related readings:  EU to adopt new sanctions against Iran  EU appeals WTO ruling in Airbus case  Iceland is on the road to recovery

The island of 320,000 people applied to join the bloc last year, when the economic crisis persuaded it to seek the safety net of EU membership after decades of reluctance.

Unlike EU hopefuls from the western Balkans, Iceland comes to the accession process well prepared -- it is already a member of the EU's borderless travel and economic cooperation zones.

But popular enthusiasm for the 27-country bloc has faded in the past year because of a row with Britain and the Netherlands about debts linked to the collapse of Iceland's banking system following the global financial crsis.

"We had political skirmishes with two old friends and the Icelandic people perceived the EU to take sides with them," Icelandic Foreign Minister Ossur Skarphedinsson told reporters in Brussels on Tuesday as the talks got under way.

The British and Dutch governments want Reykjavik to reimburse them for the billions of euros they paid depositors whose funds were frozen in Icesave, an Icelandic bank that failed in 2008.

But in a referendum in March this year, Icelanders rejected the payout plan and talks on repayment remain stalled.

Skarphedinsson said meetings in recent weeks had produced no breakthrough and talks were expected to restart in September.

"I wouldn't say the gap has closed ... I am optimistic, but I wouldn't bet my hat on it," he told Reuters in an interview.

LONG-TERM PLANS

Iceland's EU accession talks could take several years and the EU has given Iceland no target entry date.

Negotiators expect tough talks in areas such as fishing and whaling. These issues, plus the Icesave dispute, mean it will be more than two years before Iceland is ready to join, Skarphedinsson said.

EU diplomats say Brussels is likely to demand that Iceland abandon whaling, something Skarphedinsson said would be tough to swallow for a nation that has a long tradition of hunting.

Reykjavik says its whaling policies take into account the sustainability of whale stocks. "We want the EU to take into account that this is part of our tradition," Skarphedinsson said.

Icelanders are also concerned about losing control of fishing zones teeming with cod and haddock and allowing foreign investment in a sector that provides half its export revenues.

On the positive side, Iceland hopes accession would help rebuild investor trust in the economy that collapsed in 2008 and safeguard it from future financial turmoil.

An opinion poll carried out in June by the Market and Media Research polling group showed almost 60 percent of Icelanders favour the government withdrawing the country's EU application, while only about a quarter opposed such a move.