EU decision on Iceland bid delayed until March

Tue Dec 8, 2009 6:06am EST

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* Iceland must wait until March to launch EU negotiations

* EU Commission has not finalised its recommendation

* EU leaders will not discuss membership bid at summit

By Darren Ennis

BRUSSELS, Dec 8 (Reuters) - Iceland must wait until March to formally launch negotiations to join the European Union because recommendations on its application have not yet been finalised, diplomats said on Tuesday.

Reykjavik had hoped to get approval from EU leaders at a summit on Thursday to formally launch accession talks with the 27-nation bloc, but a delay in appointing a new European Commission -- the executive that steers EU enlargement policy -- has stalled the process, the diplomats said.

The new Commission was due to take office on Nov. 1 but was delayed until EU leaders appointed a new EU president and high representative for foreign affairs as part of the Lisbon reform treaty, which came into force on Dec. 1. The new 27-member EU executive is expected to take office on Feb. 1.

"There are three obstacles. The first is that we have to wait for a new European Commission since the current executive cannot take any legally-binding decisions," one diplomat with knowledge of the talks told Reuters.

"The second problem is that due to the delays in the Commission, its first draft opinion will not be published until Dec. 14, and the third reason is that Germany has not sorted out its constitution in relation to the EU's Lisbon reform treaty."

EU Leaders can only make their decision on whether to start formal negotiations with Iceland once the European Commission has made its recommendation.

"The Commission report will be in place for the next EU summit in March and the talks should be launched then, based on what the Commission has indicated so far," another diplomat said.

Iceland launched its bid to join the bloc earlier this year after the collapse of the country's banking system left the economy in tatters, forcing it to accept billions of dollars in aid from the International Monetary Fund and other lenders as its currency, the krona, virtually stopped trading overnight.

The resolutely independent Nordic nation had resisted joining the EU over concerns about access to its rich fishing grounds -- a mainstay for the island's brittle economy.

Diplomats in Brussels expect the country to join the EU more quickly than other candidate countries, possibly in two years, since Iceland is already part of the EU's single market and its borderless Schengen area.

On Monday, Iceland's economy minister was quoted as saying his country could be in the European Union in two years and a member of the 16-nation euro zone perhaps by 2014. [nGEE5B607K]

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