BRUSSELS — Eyeing a new, strategically important gateway to the Arctic, the European Union’s executive body on Wednesday encouraged Iceland’s application to become a member despite disputes over liabilities from a failed Icelandic bank.

The European Commission recommended the start of formal membership talks with Reykjavik, suggesting that the country could complete negotiations in little more than a year, with a further 12 to 18 months for formal ratification.

The recommendation, which needs to be approved by the 27 E.U. nations, comes ahead of a referendum due on March 6 over a law on the repayment of €3.9 billion, or $5 billion, from the defunct Internet bank Icesave to the governments of two E.U. countries.

A no vote in the referendum could destabilize the Icelandic government and derail its E.U. membership bid.