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Parliament in Iceland has voted by a narrow majority to set in motion an application to join the European Union, after five days of exhaustive debate.

Prime Minister Johanna Sigurdardottir of the Social Democrats has also been pushing for the adoption of the euro as the Nordic country's currency. 

The bid must now be approved by the EU, after which Iceland's people will be asked to vote on it in a referendum. 

Opponents of the bid fear EU quotas could hurt Iceland's fishing industry. 

Correspondents say Iceland, with a population of just 320,000, has traditionally been sceptical about joining the EU. 

But many people there have warmed to the idea of membership following the devastating economic meltdown which saw the top Icelandic banks collapse in a matter of days last year. 

The government will formally submit Iceland's bid to the EU in Brussels on 27 July, at a meeting of its foreign ministers. 

Arni Thor Sigurdsson, chairman of the parliamentary committee handling EU issues, told Reuters news agency that Iceland would not be ready to join the EU any earlier than 2013. 

Financial woes

Members of the 63-seat Althingi, Iceland's parliament, backed the proposal to start membership talks with the EU by 33 votes to 28, with two abstentions. 

Source: Arni Thor Sigurdsson, chairman of parliamentary committee on EU issues, quoted by Reuters 
Five members of the Left Green party, the Social Democrats' partner in the coalition government, rejected it, AFP news agency reports. 

The Social Democrats and the Left Greens formed a government at the end of April following a general election. 

Iceland's Business Minister, Gylfi Magnusson, believes that euro zone membership would help stabilise the country's currency. 

"The main benefits of EU membership at the moment would be the possibility of joining the exchange rate mechanism, and eventually adopting the euro," he told the BBC before the parliamentary vote. 

"One of the problems we have with rebuilding the financial sectors is that the currency is very much a troubled one. 

"It has historically been unstable, both with respect to the exchange rate, and to the inflation rate. But since the collapse last year it has been giving us more trouble than ever."