Iceland's buccaneering Viking spirit took a battering last year when the country's banking sector and currency collapsed and the volcanic island became an early casualty of the global economic crisis, AP reported. The disaster has forced Icelanders to consider giving up some of the nation's cherished independence and seek the shelter, and restrictions, of European Union membership. Icelandic lawmakers were debating Thursday whether to apply for membership in the 27-nation EU _ and potentially the euro currency _ as a way of securing the country's financial future. The main party in Iceland's left-leaning government supports the move. Prime Minister Johanna Sigurdardottir has said EU membership would provide a more stable exchange rate and lower interest rates. But many in this independent-minded nation, whose 320,000 people are mostly descended from Viking settlers, remain opposed, including some in government coalition member the Left Green Movement. A vote was expected later Thursday. Sigurdardottir said it would be close, but she was optimistic a bill authorizing membership talks would be approved. If it is, Sigurdardottir wants to submit a membership application to the EU by the end of the month. A final decision to join the bloc would need approval by Icelanders in a referendum. EU membership would hit Iceland's fishing industry, one of the few sectors to have survived the financial crash and a symbol of national pride. If Iceland joined the EU it would likely have to sign up to its common fisheries policy and allow other European fishermen access to its waters. Bjarni Benediktsson, leader of the minority Independence Party, told lawmakers Thursday that Iceland should protect its interests. «There are no credible reasons for Icelanders to give away full control of their natural resources,» he said. Lawmakers have held days of heated debate on the EU bid in Iceland's pocket-sized parliament, the Althingi. The debate has been sidetracked by discussions on how, and if, Iceland will reimburse the British and Dutch governments for compensation paid out to depositors of the failed Icesave Internet bank. Civic Movement, a small opposition party, wants Iceland's government to renegotiate the terms of that repayment _ a move that would infuriate Britain and the Netherlands, both EU members. Iceland is already part of the European Economic Area, a trading block that gives Icelanders the right to live and work in the EU while allowing the country to run its own agricultural, fishing and monetary policies. Until recently there was little support for closer ties with the EU. But last year's rapid collapse of Iceland's banking system under the weight of huge debts amassed during years of light economic regulation shook Icelanders' belief in their financial systems. The country's currency, the krona, has plummeted, while unemployment and inflation have spiraled. Iceland has been forced to seek a $10 billion International Monetary Fund-led bailout. Membership of the centrally managed euro would give Iceland a stronger currency with which to rebuild itself. The crisis has shaken a country long regarded as one of the world's most stable and peaceful. Late last year thousands of Icelanders held angry protests against the pro-business government, clattering pots and kitchen utensils in what some have called the «Saucepan Revolution.» The government was forced to resign and was replaced after a national election by a coalition of Sigurdardottir's Social Democrats and the Left Greens.
