Iceland is holding its first election on Saturday since its recent economic meltdown, with possible EU membership high on the agenda.A caretaker government of Social Democrats and Left-Greens has been in power since January, when an Independence Party-led coalition foundered amid protests over the economy. Iceland had to be bailed out with loans from the IMF and other countries after its banking sector all but collapsed under heavy debt. The government is turning to the EU for a solution. Prime Minister Johanna Sigurdardottir said: “One of the priorities of the next government will be to apply for EU membership and get the euro as our currency. Negotiations with the EU will show the opportunities for membership. We shouldn’t fear (the outcome of) a referendum.” That approach seems to have found favour with many, as polls show the government on course to win the election. But many Icelanders are fiercely proud of their independence and are opposed to joining the EU or the euro. Bleak times lie ahead whichever way Iceland turns. Unemployment is at highest in decades in a country the UN once billed as the most developed in the world. Facing a mountain of debt analysts expect the government to have to raise taxes and cut spending, partly by reducing public sector wages.