The informal meeting between the head of the European executive and the premier of the small northern island took place behind closed doors. The gathering was not followed by a press conference, a practice which is at odds with Brussels routine and which was not formally justified by Commission spokespersons.
Speaking to EurActiv, a Reykjavík analyst pointed to new Prime Minister Jóhanna Sigurdardóttir's lack of experience in international politics, as well as the fact that throughout her political career, "she has always been concerned with social affairs, advocacy for the poor and the disabled".
Her education and experience therefore "make her unfit to advocate the interests of Iceland abroad," the analyst concluded.
Moreover, Sigurdardóttir's mandate does not rest on safe ground. She heads the first fully-fledged left-wing government since the Republic of Iceland was created on 17 June 1944. The junior partner in the coalition – the Left-Green Movement – is split on the issues of European integration and the Icesave repayment deal, making her majority look unstable.
A clear signal of this came with the resignation on 30 September 2009 of Health Minister Ogmundur Jonasson, from the Green-Left Movement, over his opposition to the refunding of British and Dutch investors.
The former health minister's shares the concerns of many Icelanders. A Gallup survey published on 2 February shows that 67% of the island's voters are opposed to repayment, an increase of five percentage points since a previous survey.
The majority of Icelanders would vote 'no' in a referendum on repaying foreign savers, polls show (see 'Background'). Such an outcome would have major political and economic repercussions. Politically, Britain and the Netherlands would restate that their support for Iceland's EU bid was conditional upon the repayment of the lost assets, analysts say.
The Nordic country may also have more difficulty obtaining the second tranche of a 1.8 billion euro IMF loan.
Yet Iceland can bank on the support of Norway. According to Isria, Norwegian Finance Minister Sigbjørn Johnsen stated that his country "will honour its commitments to Iceland through the loans that have been made available".
Johnsen specified that "the Icesave agreements between Iceland, the Netherlands and the United Kingdom are not a condition for continued disbursement of the Norwegian loan".
Commenting on possible scenarios in the event of a 'no' vote in the March referendum, an Iceland expert said that "either a new deal is brokered on the Icesave issue, or Iceland is set for new political turbulence".
