European Union put out welcome mat for Iceland

European Union put out welcome mat for IcelandAccording to the official reports, the European Union has put out a welcome mat for Iceland to apply to join its ranks, but warned membership requires resolving its banking issues first.

The EUobserver reported on Friday that both Britain and the Netherlands demanded the wording of the invitation before the start of official discussions on Iceland joining the EU include the stipulation that it first pay for losses incurred when several of its banks failed during the financial meltdown in the fall of 2008.

In May, the European Free Trade Association Surveillance authority warned Iceland it was "under obligation to provide the minimum compensation" to depositors who lost money during the collapse. It also specified Iceland should not treat foreign and domestic depositors differently.

The EU's letter to Iceland included a "not-so-coded reference to the billions Iceland owes the U. K.," a British diplomat has said. (With Inputs from Agencies)