The European Parliament has encouraged the start of accession talks with Iceland, seeking a momentum as opposition to membership grows in the country due to an impasse in negotiations on the Icesave compensation package.

In a non-binding resolution by Cristian Dan Preda (EPP, Romania), adopted on 7 July in plenary vote in Strasbourg, MEPs hailed the political agreement on the launch of accession talks with Iceland that the EU leaders reached at their summit, on 17 June in Brussels. The decision did not specify a date for the launch of the process, which would require an additional unanimous agreement by the member states.

“Iceland’s accession can benefit both the country and the EU,” said the MEPs, noting that the public opinion and political parties in Iceland are divided on the question of EU membership. ”Public opinion towards EU membership has, in the light of the political and economic crisis, clearly shifted in a negative direction since summer 2009,” said the report. It encouraged the Icelandic authorities to initiate a public debate to address the concerns Icelanders have about EU membership.

Ahead of the start of talks, the majority of Icelandic parties are urging the government to withdraw its EU application, and the public seems more and more inclined to back this view. According to an opinion poll conducted by Gallup in March this year, 69% of Icelanders would vote against and only 30% would say ‘yes’ to EU membership if a referendum was held today. Back in November 2008, just after the outbreak of the financial crisis, 60% of Icelanders were in favour of EU membership, and only 40% against.

The MEPs said Iceland must make “further efforts” to comply with the EU rules in the field of economy, in particular those on financial supervision and deposit guarantees. They also urged Iceland to reach “an agreement acceptable to all parties” to reimburse the UK and Dutch governments, saying this would “restore confidence in Iceland’s ability to honour its commitments” and strengthen public support in the country and the EU for the accession.

The Icelandic government of Prime Minister Johanna Sigurdardottir has been involved in a dispute with the UK and the Netherlands over a compensation package for some 300,000 British and Dutch savers, who lost money in the collapse of the Icesave bank, in 2008. London and The Hague agreed to seek a bilateral solution to this issue.

The MEPs said the Icelandic judiciary system will also have to be modified to ensure its independence, with concerns over the role of the justice and human rights minister. Furthermore, Iceland was asked to ensure full compliance with EU laws in the fields of conformity assessment, accreditation and market surveillance.

Reykjavik first applied for EU membership in July 2009, after the financial crisis almost wiped out its banking sector and devastated its economy. According to EU sources, the accession talks with Iceland might formally open by the end of 2010.