European Union leaders set to start talks regarding Iceland’s membership amid banking row

Iceland to start talks on joining EU

BRUSSELS — European Union leaders are set to agree at a summit Thursday that Iceland could soon start talks on joining the EU.

According to a draft statement seen by The Associated Press, they will warn the island nation that it will have to resolve a banking dispute with EU member countries Britain and the Netherlands before it can join.

Icelandic voters in March rejected a deal to repay the British and Dutch governments euro3.8 billion ($4.7 billion) they paid to compensate customers of Iceland’s Icesave bank after its 2008 collapse.

Iceland has mixed feelings about ditching its independence — only deciding to enter the EU after a devastating financial crisis almost wiped out its banking sector, forced its currency to plunge and saw the government bailed out by the International Monetary Fund and Nordic nations.

Four out of the country’s five parties are urging the parliament to withdraw the EU bid.

A recent poll by mmr for euroskeptic Icelandic website www.andriki.is also showed that 57.6 percent of people surveyed wanted the government to withdraw its EU application. Nearly a quarter were in favor of EU membership and 18 percent were neither for or against.

For decades, Iceland avoided seeking EU membership over concerns that it would be forced to share its rich North Atlantic fishing grounds with boats from other European nations.