Iceland is shortly expected to withdraw its application to become a member state of the European Union.

The news follows comments by the Icelandic prime minister Sigmundur Davið Gunnlaugsson in a radio interview, that a resolution to formally withdraw the membership request will go before Iceland’s parliament.

This is the governments second attempt at a withdrawal resolution. The previous resolution sparked public protests and calls for a referendum on the issue.

Gunnlaugsson also indicated in the interview with Bylgjan, an Icelandic radio station, that steps towards removing capital controls put in place during the economic crisis would be made.

Iceland applied to become an EU member state in the wake of its financial crisis in July 2009. The European commission issued a favourable response to Iceland’s request in February 2010 and formal negotiations were initiated in July 2010.

"More and more people throughout Europe either no longer wish to join the EU or, as in Greece, to leave the euro currency all together." Nigel Frarage MEP

However, negotiations stalled following elections held in April 2013, which saw Gunnlaugsson's centrist Progress Party and the conservative Independence Party come to power.

Icelandic news service mbl.is quoted the prime minister as saying that accession negotiations are "at square one as all the work on it that had been carried out before was in fact obsolete ".

Reacting to Gunnlaugsson's comments EFDD group co-chair and leader of the UK Independence Party, Nigel Farage said, "This move by Icelandic authorities and the increasing Mediterranean opposition to the EU shows that the idea of the inevitability of EU integration has been smashed."

He added, "More and more people throughout Europe either no longer wish to join the EU or, as in Greece, to leave the euro currency all together."

Farage took the opportunity to criticise the euro and attributed the "bounce back" of Iceland’s economy to the country having its own currency.

The UKIP leader also said that other countries should take encouragement from the Icelandic example.

Farage said, "Greece and other Mediterranean countries are caught inside the straightjacket of an unsuitable euro currency and unsympathetic political union dominated by Germany.

Greece should decouple from the euro, devalue its currency and grow its way back to prosperity with exports and tourism."

At present, Iceland is categorised by the commission as a 'candidate country'. Iceland is already a member the European economic area (EEA), the Schengen area, European free trade association (EFTA) and is a partner in the EU's northern dimension policy, which promotes cooperation in northern Europe.

Iceland participates in the single market and two thirds of Iceland's foreign trade is with EU member states. It is also a participant in a number of EU programmes and agencies, but holds no voting rights.

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