Iceland plans now or never referendum on EU negotiations

By Louise Rasmussen and Anna ‌Ringstrom

COPENHAGEN, March 6 (Reuters) - ​Iceland ​will hold a referendum on August 29 on resuming European Union membership negotiations, the government said on Friday.

Reykjavik in 2013 abandoned EU membership talks ‌after four years of negotiations, but a rise in the cost ⁠of living and the war in Ukraine in recent years rekindled the country's interest in joining the ‌bloc, polls have shown.

The government ‌had said it would hold a referendum no later than the end of 2027.

Repeated threats by U.S. President Donald Trump to annex Greenland, located between Iceland and the United ​States, also made the question of EU membership more pressing for the Nordic country, home to almost 400,000 people.

Iceland first applied to join the EU in ⁠2009 following the collapse of its banking system during the 2008 global financial crisis, which pushed its economy to ​the brink of bankruptcy.

If voters back the resumption of talks, the final terms of EU membership will require approval in a second ​referendum. However, the government stated that a "No" vote ‌would end any future attempts to restart accession negotiations.

A new Gallup poll showed 57% of Icelanders favour talks while around 30% are ⁠opposed, according to public broadcaster RUV.

A SIGNIFICANT DECISION, EU OFFICIAL SAYS

The Icelandic people must now make "a significant decision", EU Enlargement Commissioner Marta Kos said in a statement.

"The geopolitical context is fundamentally ⁠different today than when Iceland first applied for membership," Kos added. "In a world of competing spheres ​of influence, EU membership offers an anchor into a bloc grounded in values, prosperity and security."

Iceland is already part of the European single market, the Schengen open-border travel zone, and the European ‌Free Trade Association (EFTA) alongside Norway and Liechtenstein.

EU membership would give it a direct say in decision making via institutions such as the ‌European Commission, the Council of Ministers and the European Parliament, as well as becoming part ⁠of the customs union and ‌the option to adopt the ​euro.

(Reporting by Louise Rasmussen and Stine Jacobsen in Copenhagen, Anna Ringstrom in Stockholm and Lili Bayer in Brussels, editing by Terje Solsvik and ‌Susan Fenton)

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