Iceland explores EU membership

(REYKJAVIK) - Iceland's coalition government, fiercely divided on whether the country should join the European Union, said Wednesday a special commission would weigh the pros and cons of membership.

Prime Minister Geir Haarde's centre-right Independence Party is opposed to the Nordic nationa joining the EU, as are the four parliamentary parties not in government. Only Haarde's coalition partner, the Social Democratic alliance, favours the move.

No referendum has ever been held on the issue.

The restrictive impact of EU fishery policies on Iceland's key fishing sector is a major argument brought by Icelanders opposing membership.

Iceland has, however, belonged to the European Economic Area since 1993.

Haarde, who presented his new government to President Olafur Ragnar Grimsson on Wednesday after his party came out on top in general elections earlier this month, said that by creating the special commission the two sides were "showing their willingness to overcome their differences."

"The two parties have agreed to say that from now on we'll turn towards the future not towards the past," he told a press conference.

Head of the Social Democratic Alliance, Ingibjorg Solrun Gisladottir, who is set to be foreign minister in the new government meanwhile said "the Alliance party obviously wants to move towards European membership more than the Independence Party, but it was important for us to reach an agreement."

In the new government programme published Wednesday, the coalition said it would focus on environmental protection, a main theme during the campaign.

The governing partners will also need to reach an understanding on another topic of dispute: the construction of aluminium smelters and a major hydroelectric dam in Karanhjukar in eastern Iceland's magnificent glacier landscape.

The dam, now completed and which cost more than 2.2 billion dollars, was built to provide energy for the US company Alcoa's aluminium smelter.

The Independence Party, which led the previous coalition government, favours expanding the dam, stressing the positive impact the aluminium smelters have had on the economy and employment.

The left, which has been in opposition for the past decade, has meanwhile called for a moratorium on the construction project.

"In creating this new government our two parties are launching a historic coalition," Gisladottir said.

The coalition partners hold a total of 43 seats in the 63-member parliament, while the centre-right Progressive Party that participated in the outgoing coalition government managed to win only seven assembly seats in the May 12 elections.