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Iceland seeks EU warmth to fend off isolation

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Iceland seeks EU warmth to fend off isolation

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Iceland’s relations with the European Union have been under the hotlamp in Brussels, complicated by 3.8 billion euros in British and Dutch savings lost with the Icesave bank collapse. Prime Minister Johanna Sigurdardottir and European Commission President Jose Manuel Barroso held talks in Brussels. Iceland applied in July to join the EU.

After President Olaf Ragnar Grimsson vetoed a bill on repaying the UK and Netherlands, Rykjavik’s parliament voted to hold a referendum on the Icesave bill on March 6.

The fall of Landsbanki’s online arm, Icesave, took Dutch and British customers’ deposits with it. Their governments reimbursed them. Now, many of the 320,000 Icelandic taxpayers told they must make good on the debt attribute their ruin to bankers’ mistakes.

With potential economic isolation looming for Iceland, Brussels will present its formal opinion on its application for membership in the EU later this month.