Iceland is beginning formal accession talks with the European Union on Tuesday, following the approval of the bloc's foreign ministers in Brussels.

The EU ministers agreed a "negotiating framework" on Monday, despite differences over such issues as whale hunting and the Icelandic banking collapse that hit British and Dutch investors in 2008. Iceland is already a member of the Schengen border-free travel zone and the European Free Trade Association (EFTA), and hopes to join the bloc in about two years' time.

"It is clear things might go smoothly on a certain number of subjects," said Steven Vanackere, Belgium's foreign minister, following the meeting in Brussels on Monday. However, Iceland's bid could face opposition from some EU countries.

"There are other chapters on which the EU knows efforts will have to be made by Iceland. Think of ... the financial sector," Vanackere said.

The British and Dutch governments want the prospective member to refund billions of euros they handed out in compensation to their own citizens who lost deposits as a result of the collapse of online bank Icesave. Icelanders, however, rejected a payout plan in a referendum earlier this year, and further repayment talks have been unsuccessful.

Though the issue will not formally be part of the EU accession talks, it could end up being a stumbling block to eventual membership. Fulfilment of EFTA rules is necessary to qualify for EU membership, and those rules require Iceland to resolve its debt dispute.

Public support down

Iceland's EU bid also faces challenges at home. The country's application for EU membership last year, following the collapse of its banking sector, won slim political support and Icelanders will still have to support the decision in a referendum.

An opinion poll carried out in June by Capacent Gallup showed that nearly 60 percent of Icelanders are in favor of the government withdrawing the country's application, due in part to the banking issue. Only a quarter of those polled opposed such a move.

"You have to want to join Europe," said France's EU Minister, Pierre Lellouche. "I don't have the impression from the opinion polls that the Icelanders themselves are very favorable: that's the problem."

"The whole idea of having public support for the operation is something which has been raised during [Monday's] meeting. There needs to be public support from the people of Iceland," said Belgium's Vanackere.

No special treatment

Despite hopes that talks might wrap up early and allow Iceland to join by 2012, ahead of Turkey and candidate countries in the Balkans, ministers said there would be no special treatment.

Iceland will be subject to "exactly the same kind of scrutiny and seriousness as any other candidate," said Vanackere. The process is expected to take at least 12 to 18 months, as the northern nation brings its laws in line with EU standards.

Oessur Skarphedinsson, Iceland's foreign minister, said he didn't expect the real negotiations to begin until the mid-2011, when discussions on divisive issues such as fisheries, agriculture, financial services and the environment are expected to take place.

To join the EU, Iceland may have to shut down its whale hunting industry and open up its lucrative fishing areas to EU member states, a point expected to be controversial.

Author: Martin Kuebler (AFP/dpa/Reuters)
Editor: Chuck Penfold