REYKJAVIK Three Icelandic centre-right parties are nearing agreement on a coalition government to end an impasse since the October general election, a party spokesman said on Monday, a step that may put possible EU membership back in the spotlight.
The government would be led by the Independence Party, which opposes an EU tie-up, while the junior partners - the Reform and Bright Future parties - both support membership and have been campaigning for a referendum on joining the bloc.
If a draft accord is approved by the parties, a new government could be presented at a press conference on Tuesday, Bright Future spokesman Unnsteinn Johannsson said.
"All the parties will need to vote on the government agreement tonight before this is 100 percent certain."
A coalition of the three parties would command 32 of the 63 seats in parliament, just enough to form a majority government.
This is the second time the Independence party has tried to establish a government since the October vote. The Left Greens and the Pirate Party also made unsuccessful attempts to cobble together a coalition before the mandate was returned to the Independence Party. [nL5N1E84CR]
Iceland applied to join the EU in 2009, a year after a banking crash that left the country on the verge of bankruptcy and led many to argue it should have closer ties with Europe and even join the single currency to shield it from future crises.
Iceland has since shelved negotiations with Brussels and is no longer considered a candidate country. But it is already a member of the European Free Trade Association (EFTA) and has access to the EU's single market.
(Reporting by Ragnhildur Sigurdadottir; writing by Daniel Dickson; editing by Mark Heinrich)