The European Commission recommended on February 24 2010 the opening of accession negotiations with Iceland following the country's application for membership of the European Union.

The Commission acknowledges Iceland's adherence to the common values of the Union, such as democracy, rule of law and respect for human rights, a statement said.

It identifies "challenges" ahead on the road to accession - and notes that the application by Iceland was made at a time of economic crisis.

Following the February 24 recommendation by the European Commission, it is now for the Council of the European Union to decide on the opening of accession negotiations with Iceland, the Commission said.

Enlargement and Neighbourhood Policy Commissioner Stefan Füle said: " The opinion is an important step in the accession process and provides guidance to Iceland in its efforts to become an EU member. I am confident that Iceland will show determination in addressing the challenges highlighted in the opinion."

To become a member of the EU, an applicant country must meet the political and economic criteria laid down by the European Council in Copenhagen in 1993 and adopt the entire body of EU law, the " acquis".

Through its participation in the European Economic Area (EEA), Iceland has already taken on a considerable part of the acquis, the EC said.

As an EEA member, Iceland has participated in the single market for more than 15 years.

The Commission's report identifies areas where the Icelandic authorities need to make serious efforts to achieve full alignment with EU law, in particular fisheries, agriculture and rural development, environment, free movement of capital and financial services.

Iceland submitted its application for EU membership on July 17 2009 to the Council, which, on July 27, asked the Commission to provide an opinion on the application.

As the basis of its opinion, the Commission sent a 350-page questionnaire on all EU-relevant policy areas to the Icelandic authorities.
Based on full and detailed answers from Iceland and additional information from EU member states, international organisations and local and international non-governmental organisations, the Commission has drawn up a thorough analysis of Iceland's current situation and medium-term prospects, the statement said.

Iceland's bid for accession comes at a time of economic crisis.
 
Experience with former accession candidates shows that the prospect of EU membership and ensuing reforms have a stabilising effect on financial markets, the Commission said.
 
Iceland's application highlights the EU's role in promoting economic and political stability, according to the EC statement.