Iceland confirms will not enter EU membership talks

REYKJAVIK, March 12 (Reuters) - Iceland will not start negotiations to join the European Union, its foreign ministry said, confirming a 2013 election promise by the ruling party and formalising a freeze on accession talks.

The North Atlantic nation of 325,000 people was brought to the verge of bankruptcy in 2008 when three banks collapsed during the global financial crisis.

That crisis boosted support for membership of the EU in a nation that had traditionally been isolated from mainland Europe and which has often clashed with the bloc over fishing quotas that impact one of the main drivers of its economy.

"The government considers that Iceland is no longer a candidate country and requests the EU to act in accordance with this from now on," the foreign ministry said in a statement, adding that it had spoken with EU president Latvia.

Iceland had started talks on joining the EU in 2009 but popular support has retreated since the current, more Eurosceptic, government came to power two years ago and as the economy gradually recovers.

The European Commission said Iceland remained an important partner of the 28-country EU, notably through its membership of the European Economic Area, a single internal market, and of the Schengen Area allowing passport-free travel.

"They, when things went tough for them, wanted to join. Now they want to take a break. That's fine. That's their sovereign decision. Our door is open. We continue to be in business," said European Commission spokesman Margaritis Schinas.

"There are many people, many countries, many nations who aspire not only to join the European Union, but aspire to the values and the rights that people enjoy within the European Union," Schinas added.