Niall Collins (Limerick, Fianna Fail)
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Question 8: To ask the Tánaiste and Minister for Foreign Affairs if he is supportive of an application to join the EU by Iceland; and if he will make a statement on the matter. [8823/11]

Eamon Gilmore (Dún Laoghaire, Labour)
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Iceland applied for EU membership in 2009 and accession negotiations were formally opened in July 2010. In its most recent annual progress report on Iceland, published last November, the Commission stated that the overall level of Iceland's preparedness to meet EU legislative requirements is good. Through its existing membership of the European Economic Area and the Schengen Area Iceland is already closely integrated with the EU in many sectors and this significantly facilitates the negotiations.

The process is currently at what is known as the "screening" phase, during which the Commission assesses the degree of compatibility of Iceland's laws with those of the EU. At the next Intergovernmental Conference with Iceland, to be held on 27 June, it is expected that the EU Presidency will open a number of negotiation chapters with Iceland on which the screening process has been completed. It is at this stage that actual negotiations can begin. Based on this close relationship and on our own positive experience of enlargement in the past, Ireland supports the EU candidacy of Iceland, a country with which we have strong ties of geography, history, culture and politics.

Accession is a negotiated process and, as in any negotiation, the eventual outcome and timeframe cannot be predicted with precision. Areas where significant differences between Icelandic law and EU law still exist and among those that can be expected to present challenges during the negotiations are fisheries, agriculture and rural development, environment including whaling, regional policy, and food safety including veterinary and phytosanitary regulations.

Ireland will continue to play an active role in protecting our own and the EU's interests in respect of negotiations with Iceland. In this regard we look forward to working closely with Iceland, with the European Commission and with our fellow member states to ensure a satisfactory outcome to the Icelandic accession negotiations that is of mutual benefit to Iceland and the EU.

Seán Ó Fearghaíl (Kildare South, Fianna Fail)
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I thank the Tánaiste for his response. Is he concerned that the dispute that has arisen between Iceland and the Dutch and British in terms of loan repayments is likely to emerge as a significant impediment to the advancement towards EU accession by Iceland? Has he had discussions or does he intend to have discussions with his European partners on this matter? What is his view on the recent statement by the Dutch Finance Minister, Jan Kees de Jager, that the Netherlands will block Iceland's bid to join the European Union unless the dispute over €1.3 billion in unpaid debts is resolved?

Eamon Gilmore (Dún Laoghaire, Labour)
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The collapse of Iceland's private banking sector in October 2008 developed into a diplomatic dispute when the United Kingdom and the Netherlands insisted that Iceland guarantee bank deposits of their citizens held in the collapsed Icelandic bank Icesave. Both Governments provided loans to facilitate this guarantee and the dispute has since centred on the terms for repayment.

The Icesave dispute had hampered progress towards the opening of accession negotiations with Iceland. However, member states unanimously agreed at last June's European Council to proceed with the opening of formal talks. The conclusions highlighted the need for Iceland to address existing obligations such as those identified by the European Free Trade Association, EFTA, surveillance authority under the Agreement on the European Economic Area.

In a referendum on 9 April Icelandic citizens voted not to accept the terms of repayment negotiated between Iceland, the Netherlands and the United Kingdom. The matter will be now dealt with by the European Free Trade Association court. Both the United Kingdom and the Netherlands have expressed disappointment at the referendum result while stressing their commitment to recovering the loans. The Icelandic Government has stressed that the referendum result will not affect its application for EU membership. The European Commission, meanwhile, has described the issue as a bilateral matter which must be resolved outside of EU negotiation process. However, it is expected that the Netherlands and the United Kingdom will be reluctant to allow EU membership negotiations to conclude until the Icesave issue has been dealt with to their satisfaction.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Does the Tánaiste not agree that we could take a leaf out of the Icelandic people's book in holding a referendum on our bank bailout? Icelandic voters were allowed to have their say and that gave their Government a stronger hand in negotiations on how to deal with their banking crisis. The demand of the people, expressed in two referenda, that the bondholders should pay some of the cost offers lessons to us. Does the Tánaiste agree that one lesson from the situation following those referenda is that the sky did not fall on the heads of the people of Iceland? Negotiations continue and the country is probably in a stronger position as a result of the people being allowed to express their view in a referendum. Perhaps we should consider doing the same.

Eamon Gilmore (Dún Laoghaire, Labour)
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Ireland's situation is quite different from that of Iceland which concerns a bilateral dispute between Iceland and the United Kingdom and Netherlands regarding the loss of private depositor funds guaranteed under EFTA rules and whether Iceland should recover such losses. Iceland's referendum concerned this issue specifically and was not linked to the programme of support which the Icelandic Government negotiated with the IMF. Iceland has confirmed that it remains committed to the IMF programme, which is progressing well.

The issue was best summarised in a recent editorial in The Irish Times which states:

Despite the two Icelandic referendum results its elected Government did not unilaterally abandon legal obligations but rather sought to negotiate the best available deal. The country is still bound up with the international system and seeks to enhance that position by joining the EU.

If the bilateral difficulties Iceland has with the United Kingdom and the Netherlands are not concluded to the satisfaction of those countries, the latter may veto their accession to the EU.