Iceland vote 'no block on EU entry plans'

(RIGA) - Iceland's rejection of a deal to compensate the British and Dutch governments over the collapse of Icesave bank must not become a hurdle in the country's drive to join the EU, ally Latvia warned on Sunday.

"The negative result of the referendum should not have direct influence on Iceland's EU accession negotiations," Latvian Foreign Minister Maris Riekstins said in a statement.

"The accession criteria for all candidate countries are clearly defined and differing positions on bilateral issues, in their turn, should be solved in a bilateral framework," he said.

An overwhelming 93.5 percent of Icelandic voters rejected the deal to pay billions to Britain and the Netherlands for the collapse of Icesave, according to near-final referendum results Sunday.

Latvia, a Baltic state of 2.2 million people, split from the crumbling Soviet Union in 1991. Iceland, an Atlantic island nation of 320,000, was the first country to recognise Latvian independence that year and their ties have been close ever since.