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European Commission


Brussels, 10 October 2012

Key findings on the 2012 progress report on Iceland

The Progress Report on Iceland is part of the 2012 Enlargement package adopted by the European Commission on 10 October. The Commission concluded that Iceland continues to fully meet the political criteria for EU membership, can be considered a functioning market economy and, overall, is well advanced in its preparations for membership. Accession negotiations are progressing well, although EU accession remains an issue of lively public debate in Iceland. The Commission is confident that the EU will be able to present a package for the negotiations which takes Iceland's specificities into account and safeguards the principles and acquis of the EU, allowing also, in due course, for a fully informed decision of the Icelandic people.

Political criteria

Iceland meets the political criteria for membership of the EU. Iceland is a functioning democracy with strong institutions and deeply rooted traditions of representative democracy. The country's judicial system maintains a high standard, and Iceland ensures the continuous strengthening of its already high level of protection of fundamental rights.

Iceland has reinforced the parliament's power of political supervision. A standing committee on constitutional matters and government control was set up. The Prime Minister now needs to report on the follow-up of parliamentary resolutions. In addition, Iceland improved its already efficient public administration and strengthened further its anti-corruption framework by putting in place a specific code of conduct for central government staff.

Proposed changes to the Constitution based on the comprehensive assessment by the advisory constitutional council were reviewed by the parliament. A national referendum on a number of key proposals has been called for 20 October 2012.

Economic criteria

Iceland can be considered a functioning market economy. The economy recovered further following the long and severe post-crisis recession and grew more rapidly than expected. Iceland paid back over half of the loans received from the IMF and Nordic countries ahead of time. Still, public and private debt levels remain high. Unemployment has gone down but at 7% remains high for the country.

The financial sector has further stabilised but significant uncertainties remain with respect to banks’ asset quality. The removal of capital restrictions poses a particular challenge, although work has continued to gradually lift the capital controls.

EU legislation

Iceland's preparedness to meet EU legislative requirements continues to be overall good in a wide range of chapters. This is underlined by the good progress in negotiations in a number of policy areas. In addition, Iceland has started preparations in key areas such as regional policy and agriculture.

Some shortcomings are still to be noted, mainly in the areas of financial services, agriculture and rural development, environment, fisheries, free movement of capital, as well as food safety, veterinary and phytosanitary policy, taxation and customs.

Continuous attention is needed to ensure the necessary administrative and financial resources for the timely adoption and implementation of the body of EU law.


1970: Iceland joins European Free Trade Association (EFTA)

1973: Free trade agreement with the European Economic Community (EEC)

1994: Iceland joins the European Economic Area (EEA)

2000: Iceland becomes a participant in the Schengen agreement

July 2009: Iceland presents its application for membership of the EU

February 2010: Commission's Opinion on Iceland's application for EU membership

July 2010: Start of the accession negotiations

15 November 2010: Start of screening meetings

20 June 2011: End of screening meetings

22 June 2012: Accession conference: three chapters opened, bringing the number of opened chapters to 18 of which 10 have been provisionally closed.

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