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Iceland to drop EU membership bid

Iceland will drop its European Union membership bid without holding a referendum that was earlier promised by the two ruling Euro-sceptic parties, the government said.

REYKJAVIK: Iceland will drop its European Union (EU) membership bid without holding a referendum that was earlier promised by the two ruling Euro-sceptic parties, the government said on Friday.

The centrist Progress Party and the right-wing Independence Party agreed on a draft bill asking the government "to retract the application for membership of the European Union", which the island nation presented in 2010.

"Such a proposal will be my responsibility. The foreign minister at the time presented the proposal for application, so it is natural that I will present the proposal to retract it," Foreign Minister Gunnar Bragi Sveinsson told Icelandic public broadcaster RUV.

The move was foreseeable, as the current government suspended EU accession talks indefinitely last September, following a promise made during the 2013 election campaign.

The two coalition partners had nonetheless promised in May that they would let the citizens decide in a referendum, which would lean towards the no according to the polls.

"Another application will not be made without first holding a referendum to decide if the Icelandic people intend to join the European Union," the draft bill read.

Iceland is a member of the Schengen treaty and the European Economic Area.

The main obstacle if Iceland were to join the EU would be the fishing industry, an issue that was never brought up in the negotiations between the country and the bloc.

Supporters of joining the EU - most of the Social Democrats and a minority of the members of the ruling parties - argue that the main advantage of becoming a member of the bloc would be to adopt the common currency, which they believe would stabilise the economy.

Ragnheidur Rikhardsdottir, the leader of the Independence Party parliamentary group, said she would have preferred a referendum.

"I would have wanted a different outcome, but the parliamentary group decided to retract the application in this manner and I am a part of the Independence Party parliamentary group," she said.

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