Iceland moves closer to EU membership

The resounding victory for Iceland's left-wing coalition at the weekend has brought Icelandic EU membership much closer. The Prime Minister Johanna Sigurdardottir has made it clear that her priority is to begin negotiations on EU accession, with the deal being decided by a referendum. Given that Iceland has access to single market, and has therefore adopted a large amount of the Community acquis, there is no reason why accession could not be concluded quickly.

It is truly an historic result in Iceland - the most novice MPs ever elected and the most women MPs in the country's history, and it also demonstrates how quickly things can change in politics. After all, it's less than a year ago that some British Eurosceptics were looking to Iceland as a country to emulate. Indeed, one increasingly prominent Conservative MEP, known for his unstinting Euroscepticism and commitment to privatising the NHS, proclaimed that:

"Being outside the EU, Iceland has been able to cut taxes and regulation, and to open up its economy. For 70 years the Althing has been dominated by the splendidly named Independence party, which has pursued the kind of Thatcherite agenda that is off limits to EU members... Icelanders understand that there is a connection between living in an independent state and living independently from the state. They have no more desire to submit to international than to national regulation. That attitude has made them the happiest, freest and wealthiest people on earth."

I'm sure Dan won't mind being reminded!

Iceland's EU membership grows more likely

It looks increasingly as though Iceland is going to apply to join the European Union, with this fascinating report that they expect to do so within the next couple of months with a view to membership in 2011. Enlargement Commissioner Olli Rehn has even gone as far as suggesting that Croatia and Iceland could join the EU at the same time.

Following the collapse of Iceland's ruling conservative government at the start of this week, a temporary centre-left government has taken over until elections take place in May. The new Social Democrat government is pro-European and will make EU membership a central theme of their campaign.

The second question for Iceland is whether they will also apply to join the euro. Their currency, the krona, has been ruined by the financial collapse, and support amongst Icelandic public opinion is actually stronger for euro membership than for EU membership. However, while it is difficult to see any significant barriers to Iceland's membership of the EU - they are a country of roughly 300,000 and have a small economy which, aside from a sizeable fishing sector, would not be difficult to integrate (indeed, they already apply most EU single market legislation) - their interest rates are at 18% and they would fall foul of the strict rules laid down in the Maastricht Treaty that govern whether a country is able to join the Eurozone

If Iceland's membership would be popular with virtually all EU countries it would be a bitter pill for the staunchest British eurosceptics to swallow. It is difficult to believe that, until recently, the likes of Dan Hannan used to cite Iceland as an example that showed Britain could prosper outside the EU.

Is Iceland going to become the next country to join the EU?

Well, stranger things have happened. Iceland's Prime Minister, Geir Haarde has announced the creation of a commission to analyse whether Iceland should join the EU, while the Icelandic Foreign Ministry has drafted an action plan that would see the country make a membership application early next year with a view to becoming a full member in 2011. Given that Iceland already implements EU single market legislation in order to have access to the common market, it should not take them long to adopt the rest of the EU acquis communautaire.
 
In a further sign of the government's determination to proceed quickly, Haarde has announced that his ruling Independence Party will hold its 2009 conference in January instead of next October as scheduled, purely to consider the question of EU membership.
 
Iceland has never before applied for EU membership, but the price of isolation has been brought home to them following the collapse of its banking sector and a massive run on its currency, the Króna. This has convinced many in Iceland that the country needs to join the euro. For this to happen, Iceland must be a member of the EU. Indeed, recent opinion polls show that 70% of Icelanders are in favour of EU membership.
 
All of which must have eurosceptics, and particularly Dan Hannan, (who frequently argue that Britain's relationship with the EU should be akin to that of Iceland), weeping into their drinks. It's been a bad few weeks for their arguments.

Dan Hannan on Iceland

Sadly the financial crisis continues to hit Iceland hard as it battles to keep its head above the water, seeing its currency collapse and desperately seeking foreign loans, while West Ham's owner Bjorgofur Gudmundsson is, according to the Daily Telegraph, facing the collapse of his Samson Holdings company, having already lost £230million.

Meanwhile, several prominent Icelanders, including possibly Iceland's most famous national, Bjork, has called for the country to join the safe haven of the EU and the euro, the idea of which will appall Tory MEP Dan Hannan.

A long time fan of Iceland, Hannan spent his stag night there so he could enjoy himself outside the EU (though obviously not outside most EU regulations, which Iceland follows as a member of the EEA, though with no say in shaping them).

And well done to the Fabian's Next Left blog which has dug up an astonishing article Hannan wrote for the Spectator in 2004.

In it he writes: "Being outside the EU, Iceland has been able to cut taxes and regulation, and to open up its economy. For 70 years the Althing has been dominated by the splendidly named Independence party, which has pursued the kind of Thatcherite agenda that is off limits to EU members...

"They understand that there is a connection between living in an independent state and living independently from the state. They have no more desire to submit to international than to national regulation. That attitude has made them the happiest, freest and wealthiest people on earth. Long may they remain so."

Quite spectacularly wide of the mark!