Iceland spurns €30m over fears of EU propaganda

IPA money is normally spent on strengthening institutional capacity in order to help with the accession process, as well as cross-border co-operation, economic and social improvement and rural development.

In Iceland's case, the money was supposed to be going towards projects on statistics and preparation for participation in EU agencies as well as on various workshops and study visits.

The money was also to go to an information campaign by the EU to inform the Icelandic people about what it does. It is this aspect that has aroused controversy.

In the last fortnight, it has become clear that the government has decided to keep its distance from the instrument, with applications having been halted by a number of government ministries.

Three Icelandic ministers in the EU-sceptic camp in particular fear that the funds would be used to change Icelandic legislation in a pro-EU direction already at this stage of negotiations.

Both the agriculture and fisheries ministry and the finance ministry - headed by the leader of the hard-left and eurosceptic Left Green Movement, Steingrimur J. Sigfusson - have announced that they do not intend to apply for any grants, and two other ministries are considering not applying: the justice ministry and the transport, communications and local government ministry, whose new head, MP Ogmundur Jonasson, has also put on hold project proposals prepared by his predecessor.

In late October, MP Arni Por Sigurdsson, a member Left Greens and the chairman of the foreign affairs committee in the Icelandic parliament, declared that applications would stop.

The European Commission for its part told EUobserver that official notification of the move has not been made by Reykjavik and that as far as they are concerned, the country "still has lots of time to apply for funding."

Enlargement spokeswoman, Angela Filote, denied that the IPA cash amounted to pro-EU propaganda, however.

"The pre-accession funding ... is made available to all candidate and pre-candidate countries," she said. "It provides an opportunity for the Icelandic partners to make use of EU expertise to facilitate considerations and support plans and preparations for potential EU membership."

"It is eventually up to the government in agreement with the commission to decide on what they want to use IPA funding for."

It is understood that the issue within the government is "a delicate one," according to sources close to the discussion. The commission says it is committed to finding a way that Reykjavik can use the funds that is acceptable to the government.

The news comes on the eve of the current commission's first report on the overall state of European Union accession negotiations.