Iceland has applied to the presidency of the European Union for membership.  The application, made on Friday, followed a 33-to-28 vote (with 2 abstentions) on Thursday in the Alþingi (the national parliament of Iceland) to approve the application, on a motion proposed by the Social Democratic Alliance party.
The application follows a campaign promise to join the EU made by Prime Minister of Iceland Jóhanna Sigurðardóttir during the recent elections in April.  Should the application be approved by the EU (a process that involves evaluating, among other things, whether Iceland satisfies the Copenhagen criteria), the citizens of Iceland will have to vote in a referendum on whether to join.
Iceland is already a member of the European Economic Area, and had a free trade agreement with the European Economic Community prior to the creation of the EEA in 1994.  According to Gylfi Magnússon, Iceland's Business Minister, the two principal benefits to gain from formal entry into the EU itself will be entry into the European Exchange Rate Mechanism and the adoption of the euro as Iceland's currency.  Iceland may choose to seek exemption from the provisions of the Maastricht Treaty that require a two-year wait before the euro can be adopted.
However, the closeness of the Alþingi vote reflects divided opinion within Iceland itself on the matter.  Icelanders have concerns over loss of independence, and over how large their say will be, as a country of just 320,000 people, in the EU as a whole.  The parliamentary vote also split cross-party alliances in the Alþingi.  Five members of the Left-Green Movement, that currently forms a coalition government with the Social Democratic Alliance, voted against the motion. 
Other issues to affect the progress of the membership application will include Iceland's whaling, and fishing and agricultural issues in general.  39% of Iceland's exports come from its fisheries, and Einar Mar Thordarson, a political scientist at the University of Iceland, predicts that the hardest part of Iceland's pre-membership negotiations will involve the EU's Common Fisheries Policy.
Should the application be approved by both the EU and Icelanders, Iceland is not expected to become an EU member for several years.  Arni Thor Sigurdsson, chairman of the Alþingi committee for EU issues, predicted that Iceland would not be an EU member until 2013 at the earliest.
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Iceland makes application for membership of the European Union