The European Commission has recommended starting negotiations for Iceland to join the European Union.

"Today the commission published its opinion on a new applicant country, Iceland, in which it recommends the opening of accession negotiations," EU Enlargement Commissioner Stefan Fule told reporters in Brussels on Wednesday.

Reykjavik, which put in its application bid last July, hopes to be able to enter the European Union in 2012.

A catastrophic collapse

The country shares European values such as democracy, rule of law and human rights, the Commission said.

However, Iceland has suffered a massive banking and currency collapse in the downturn. The small country's high national debt is seen as a challenge to its candidacy.

Iceland joins Croatia, Macedonia and Turkey in the queue of official EU candidate nations waiting for membership. Given the various problems of the other candidates, Iceland could end up becoming the first of the bunch to join the EU.

The commission's recommendation comes despite an ongoing row between Iceland and EU members Britain and Netherlands over the collapse of the Icesave online bank in October 2008, which hit thousands of savers in the UK and the Netherlands.

All new entrants to the EU must commit to joining the single currency, the euro, a move many in Iceland welcome after the fall of the krona.

smh/dpa/AFP
Editor: Nancy Isenson