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Iceland - EU-Iceland relations

Iceland is a country with deep democratic roots and a tradition of good governance, high social and environmental standards and historically close ties with many other European countries.

Iceland already enjoys a high degree of integration with the EU through its membership of the European Economic Area (EEA) since 1994, as well as the Schengen area, which allows its citizens to travel and work freely throughout the EU.

Through the EEA, Iceland already participates in the single market and contributes financially towards social and economic cohesion in Europe. A significant proportion of the EU's laws are applied in Iceland today. Iceland also participates, albeit with no voting rights, in a number of EU agencies and programmes, covering areas including enterprise, environment, education and research.

Iceland has been a member of The European Free Trade Association (EFTA) since 1970 and has a bilateral Free Trade Agreement with the EEC since 1972. Two thirds of Iceland's foreign trade is with EU Member States.

Iceland is also a signatory of the Dublin Regulation  on asylum policy in Europe and was a founding member of the North Atlantic Treaty Organization (NATO). The country is an important partner for the EU in the framework of its Northern Dimension and developing Arctic policy.

For a full list of treaties and agreements signed by Iceland and the European Communities, see here.

Hit severely by the 2008 financial crisis and economic downturn, Iceland underwent an economic recession, following the collapse of its banking system and the devaluation of the national currency. Nevertheless, the country's economic base remains strong and the prospect of EU membership is expected to have a stabilising effect on the Icelandic economy. Already, the economy has been gradually making headway out of the crisis, with some encouraging signs of stabilisation and the IMF stabilisation programme on track.

The European Commission has amended the Instrument for Pre-accession Assistance in order to include Iceland as a beneficiary. The aim of the EU financial assistance to Iceland is to support its efforts towards alignment with the EU acquis, in order to become fully prepared to take on the obligations of membership of the European Union by the time of accession.

Steps towards accession

Iceland submitted its application for EU membership to the Council in July 2009. At the end of July, the Council asked the European Commission to prepare an opinion on Iceland's application.

On the basis of the answers to a questionnaire completed by the Icelandic authorities and returned to the European Commission in October, the Commission adopted its opinion on Iceland's application for membership on 24 February 2010.

The Commission's opinion covers all aspects of the accession criteria; political, economic and relating to Iceland's capacity to implement EU law, building on the December 2006 European Council conclusions on a renewed consensus for EU enlargement based on rigorous but fair conditionality and the 'own merits' principle.

Based on an assessment of the country's readiness to meet the requirements of EU membership, in its opinion, the Commission recommended opening of accession negotiations with Iceland to the Council of the European Union.

On 17 June 2010 a further step in Iceland's bid to join the EU has been taken with the decision by the European Council to open accession negotiations with the country. On 26 July, the EU Negotiating Framework was adopted; it outlines the principles, substance and procedures guiding the negotiations with Iceland, thus paving the way for the upcoming accession talks between Iceland and the EU. The first intergovernmental conference on the accession of Iceland to the European Union was held in Brussels on 27 July, formally opening accession negotiations with the country.

Key dates of Iceland's European integration

27 July 2010: First intergovernmental conference on Iceland's EU accession.

17 June 2010: European Council decides to open negotiations with Iceland.

24 February 2010: Opinion by the Commission on Iceland's application for membership of the European Union.

11 January 2010: EU delegation takes up office in Reykjavik.

2 November 2009: Stefan Haukur Johannesson, Iceland's ambassador to the EU, is appointed Chief Negotiator in the forthcoming accession talks.

October 2009: Iceland hands over the replies of the European Commission questionaire.

27 July 2009: European Council refers application to the European Commission seeking Opinion.

16 July 2009: Iceland applies to join EU.

2000: Iceland becomes a participant in the Schengen agreement.

1994: Iceland joins European Economic Area (EEA).

1973: Free trade agreement with the European Community.

1970: Iceland joins European Free Trade Association (EFTA).