General * July 16, 2009 Icelandic parliament passed motion approving EU Membership application. * Nearly all Icelandic politicians were convinced that EU membership would place constraints on the country, particularly in the fisheries and agrarian sectors, rather than provide benefits * Iceland is already a member of the European Free Trade Association(EFTA) * Iceland must resolve its debt disputes before becoming a member of the EU, according to rules of the EFTA. Meaning, they must pay back GB and the Netherlands

IceSave * Icesave, an online subsidiary of Landsbanki bank, collapsed along with its parent and Iceland's other major banks in October 2008, leaving 340,000 British and Dutch citizens out of pocket. * Both Britain and The Netherlands reimbursed their citizens' deposits and have since been seeking repayment from Iceland. The U.K. is owed about 2.3 billion pounds ($3.6 billion) in compensation and The Netherlands euro1.3 billion ($1.7 billion). * Should the taxpayers of Iceland have to pay for the Hubris of a few bankers? * Iceland's failure to settle the dispute has delayed payments from a $4.6 billion loan from the International Monetary Fund. Some legislators believe Britain and the Netherlands could also block Iceland's application to join the European Union until an Icesave deal is signed into law.
The Financial Crisis * Under-estimation of the risk of a foreign currency shortage, and a subsequent lack of access to foreign currency, contributed significantly to the financial crisis * In the first week of October 2008, almost the entire Icelandic banking system collapsed, bringing the whole economy down with it and the ISK depreciated more than most small states' currencies. * The fall of the ISK has substantially increased the debt burden borne by those households and firms that had borrowed in foreign