March 18, 2010 / 10:54 PM / 9 years ago

Dutch won't block Iceland's EU accession talks-report

* Dutch ForMin: EU talks can start despite Icesave dispute

* Membership only possible after Icesave settlement-formin

AMSTERDAM, March 18 (Reuters) - The Netherlands will not block the start of Iceland’s accession talks with the European Union despite an ongoing dispute over repayment of lost bank savings, Dutch agency ANP quoted the Dutch foreign minister as saying on Thursday.

Brussels invited Reykjavik to accession talks last month, but Dutch Foreign Minister Maxime Verhagen said nearly two weeks ago that the so-called Icesave dispute would be taken into consideration when deciding whether to open negotiations. [ID:nLDE62504P]

As a member of the EU, Netherlands can block Iceland’s bid to join the bloc, launched following the collapse of its financial system in 2008.

The Netherlands and Great Britain want Iceland to repay more than $5 billion in compensation the two EU countries paid out to local savers in Icelandic online banks who saw their deposits vanish in the meltdown.

“I would rather have them at the negotiation table than with their back turned to the EU,” ANP quoted Verhagen as saying in the Dutch parliament.

Iceland’s settlement of the debt was necessary, however, before it could become an EU member, Verhagen said.

“One way or another we have to continue with Iceland. One way or another we will have to get the money back,” he added, according to ANP.

A spokesman for Verhagen was not immediately available to confirm the comments.

The Dutch finance ministry said on Monday that the Netherlands and Britain were ready to resume talks with Iceland in order to reach a repayment deal after negotiations collapsed at the start of March. [ID:nLDE62E22I]

Iceland applied for EU membership last July following a razor-thin vote in parliament. But opinion polls now show EU entry, which would have to be approved in a referendum once entry talks had been concluded, is supported by less than a third of Icelanders. (Reporting by Gilbert Kreijger; editing by Noah Barkin)

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