New gov't to push for vote on EU membership

Icelandic Prime Minister Johanna Sigurdardottir has announced her coalition will press parliament to vote on whether the country - shaken by the financial crisis - should apply for EU membership. Voters will have the last word, via a referendum.


AFP - Iceland's new government announced Sunday it would soon press parliament to vote on whether the country -- badly shaken by the global financial crisis -- should apply for European Union membership.

Prime Minister Johanna Sigurdardottir said her left-wing coalition would introduce a resolution shortly after the newly elected parliament meets for the first time on Friday.

"It will be in the first days after the inaugural session," the Social Democrat told a news conference. "We insist that a membership application be sent to the EU before July."

The coalition released a general policy paper stating that it will ask the parliament that was elected last month to vote on whether to apply for EU membership.

But voters will have Iceland's last word, via a referendum, on whether it pursues EU accession, the document said, acknowledging divisions between Social Democrats and their eurosceptic coalition partners of the Left Green Movement.

"The two parties have agreed to disagree on the EU issue but both parties emphasise their joint intent that it be the nation which, in a referendum, will finally determine whether Iceland will (apply to) join the European Union," it said.

Iceland's left-wing coalition scored a historic election victory on April 25, becoming the majority in parliament for the first time as the Social Democrats and the Greens won a combined total of 34 of the 63 seats.

The conservative Independence Party, which had faced street protests over its handling of the economy, was ousted after 18 years in power.

Sigurdardottir unveiled a 12-minister cabinet that includes five Social Democrats, five Left Greens and two independents.

The left-wing coalition is deeply divided over whether to join the European Union, but analysts say Sigurdardottir appears confident she can get around this obstacle by getting a majority of parliament to back the opening of accession talks.

The Social Democrats -- who hold 20 seats while the eurosceptic Greens have 14 -- could get two other pro-European parties, the Citizen Movement and the Progressive Party, to back their resolution, analysts said.

Left Green leader Steingrimur Sigfusson, the new government's finance minister, said he was in favour of letting parliament decide on EU membership despite his own reservations about accession.

"We strongly support a democratic solution on the question of the EU and this will go through the parliamentary way," he said at the news conference alongside the prime minister.

"In parliament, only convictions count, nothing else," he said.

A Capacent Gallup poll released Wednesday by RUV radio showed that 61 percent of Icelanders were in favour of opening EU accession talks while nearly 27 percent were against it.

Support for EU negotiations has soared since Iceland's once-booming financial sector crumbled in October, pushing thousands of the country's 320,000 inhabitants out of their jobs as their savings evaporated.

The conservative government was forced to resign in late January amid massive public protests over the crisis.

The coalition said Sunday its "central aim" was to balance the budget by 2013.

At the same time, it said it would launch "an ambitious plan of job creation and innovation to restore Iceland's position among the most energetic and competitive states in the world by 2020."

It also announced plans to take a series measures in the next 100 days to restructure the beleaguered banking system.

In the course of several days last October, the government was forced to take control of three liquidity-starved banks.

Prior to the crisis Iceland was among the world's most prosperous nations, with growth averaging four percent a year.

But momentum slowed to just 0.3 percent in 2008 and its economy is expected to contract by nearly 10 percent this year

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