European Commissioner for Enlargement Olli Rehn said earlier this month during a videoconference with Reykjavik from Oslo that the European Commission is already mentally preparing for a membership application from Iceland, and that a rapid treatment of the application could not be excluded. He mentioned specifically that the island could become a member of the European Union already before the end of 2009, even before Croatia.

Iceland came in serious financial difficulties this year as a result of the global banking crisis, which made the banking sector on the island collapse completely. One of the side effects of that collapse has been that the Icelandic crown's value has fallen like a brick, hitting a large part of the population, even those who didn't actively participate in the island's banking adventure. It's not uncommon on the island to have the loan for the house or the car in foreign currency, primarily the euro, and some islanders found themselves these last months paying more on interests on their loans than they earn in a month's time. Even those who didn't take loans in foreign currencies were hit by the crisis, because local interest rates went completely through the roof, and fixed interest rates on loans are virtually an unknown concept in the country. As a consequence, several demonstrations took place in the local capital Reykjavik in November and December, some of them even ending in riots, a rarity on the island, even though we're still far away from Greek-anarchic style “demonstrations”. It is worth noting though that some of the demonstrations mobilized as many as several thousands of protesters, a significant number considering there live only 300,000 people on Iceland.

The island is a member of NAtO, EftA, EEA and the Schengen Area, but has so far kept itself outside the European Union. Opinion polls have always shown a large opposition against EU membership, and therefore Iceland is the only Nordic country that hasn't even organized a referendum on EU membership. One of the reasons why Iceland never has wanted to join the EU are the rich fishing grounds around the island, but recently the strong and very expansive banking sector became an argument too. Now that the latter has collapsed completely, the argument has disappeared too, and the EU wind on the island has shifted direction radically. According to the latest opinion polls, there would now be a large majority favoring accession to the EU.

This shift in opinion is the reason why former Icelandic Minister of Foreign Affairs Jón Baldvin Hannibalsson directly asked European Commissioner Olli Rehn during the video conference how soon Iceland could become a member of the EU. The island is in an emergency situation, and therefore needs an emergency solution. The response of Olli Regn was remarkably direct too: according to him, Iceland could count on an express treatment, if it were to apply, and join the Union already during 2009 – and the same applies for Norway too, he added. Other countries, like e.g. Croatia, have to exercise much more patience to become an EU member, and may have to see how Iceland is allowed to take a shortcut right before their nose. Both Iceland and Norway are already members of the EEA, and about three quarters of EU legislation is therefore already in place in the two Nordic countries, Olli Rehn cited as the reason why he thinks an integration into the EU would be so easy to complete.

But is that really the only reason? Obviously, having such a large part of the legislation already in place does play a big role, but the advantages an Icelandic and Norwegian EU membership would bring to the EU probably play an even bigger role. The banking sector on Iceland lays in ruins today and the island is virtually bankrupt, but it's not like the country has become an underdeveloped country, or would become in the near future. Chances are it would become a net payer to the EU within a relatively short period, certainly when compared to countries like, say, Bulgaria, Croatia, or… well, even Spain or Portugal. And by the way, now that we're talking about those two last countries, their governments probably already calculated and checked once again exactly how much cod and other fish their fishermen would be allowed to capture in the Icelandic waters would the island become an EU member. If it were up to them, Iceland could probably join the EU already next week if it's already too late to let it join the Union before the end of this week. Sure enough, the EU might try to sell the story about the express treatment of Iceland's EU membership application as one about mercy and sympathy for the poor island up in the North, but it's better to put not too much faith in it.

In fact, I'd rather like to warn the population and the government on Iceland against rushing into an EU membership to solve a short term problem. Negotiations will show whether Iceland will be allowed at all to join the Eurozone on the same day it joins the European Union. I'm afraid though that in the “best” case, Iceland will be able to trade in its fishing grounds for an immediate introduction of the euro on the island, but in the worst case, it will be confronted with an “armada” of Spanish and Portuguese fisherman catching all the cod in their waters, without even having the right to protest against it, at the same time as it is being denied admission to the Eurozone before the country is financially completely back on its feet. In that case, it will be a very unpleasant awakening from the current Icelandic nightmare in a few months or years from now.