Iceland: EU membership depends on fishery 'superpowers'

"It will all rest with the Spaniards," Skarphedinsson told journalists after an intergovernmental conference (IGC), acknowledging that Icelanders themselves were not yet ready to commit to EU membership.

"They want to see the outcome of the negotiations. There is especially one thing that weighs on their minds, which is related to the psyche of the nation, and that is fisheries."

Iceland applied to join the 27-member bloc in 2009, amid a surge of EU enthusiasm following the island nation's banking sector meltdown a year earlier.

But concerns over sovereignty losses, especially in the fisheries sector, and a skirmish with the UK and the Netherlands over the collapse of the online Icesave savings account have since seen support plummet to between between 30 and 40 percent.

Despite these challenges, Skarphedinsson said he was confident that Iceland would join the Union in the coming years, his optimism partially based on the flexibility shown by the EU during accession negotiations with Norway in the 1990s. Despite an agreement on fisheries, Norwegians ultimately rejected EU membership in a referendum in 1994 however.

EU member states share fishing waters under the bloc's common fisheries policy (CFP), with total allowable catches (TACS) for different species and national quotas agreed during late-night carve-ups between ministers in Brussels each December.

The system doesn't satisfy everyone. Irish fishermen, for example, grumble that access to the country's substantial fish stocks was quietly negotiated away during accession talks in the 1970s by a government far more concerned with agriculture.

Reykjavik however has its gaze firmly fixed on the fisheries portfolio. "This is the first time that the EU is negotiating with a country that comes to the table with fisheries as the big, vital, special needs [issue]," said Skarphedinsson.

Progress on Monday saw all sides support an intensification of talks, facilitated by Iceland's membership of the European Economic Area (EEA) and the Schengen visa-free zone.

Negotiators have already closed the science/research and education/culture chapters, although they could potentially be reopened if the EU deemed necessary.

EU enlargement commissioner Stefan Fuele said roughly one third of the chapters were "linked" to the EEA, with another third "partially linked".

"With that kind of alignment ... one would expect a fast process forward," he said.

Iceland wants half the remaining accession chapters opened under the incoming Polish EU presidency, and the other half under the following Danish EU presidency.

Monday's IGC took place after an eight-month 'screening' process, during which the EU learnt a lot about Iceland, said Fuele.

He added that the EU could learn lessons from Iceland's "sustainable [fisheries] policy", with the commission set to come forward with proposals to reform the much-criticised CFP this July.

As well as the wider fisheries question, the two sides will also need to resolve an shorter-term row over mackerel quotas, with warmer sea temperatures pushing European stocks of the fish species increasingly northwards in recent years.