Iceland applied for EU membership in July 2009. The accession negotiations with the country were opened one year later, in July 2010.

The country has deep democratic roots and a tradition of good governance, high social, health and environmental standards. Icelanders enjoy universal healthcare and infant mortality is lower than in any other country in the world. Post-secondary education is also universal and at 99.9%, Iceland's literacy rate is the world's highest. Iceland generates over 70% of the energy it consumes (and practically all of its electricity) from renewable sources, mostly geothermal, which is more than any other country.

Iceland's main exports are fish and fish products, aluminum, ferro-silicon alloys, machinery and electronic equipment for the fishing industry, software, medical and pharmaceutical products, and woollen goods. Main imports are machinery and equipment, petroleum products, foodstuffs and textiles. Two thirds of external trade is with EU Member States.

Having experienced a period of rapid economic growth in recent years, becoming one of the wealthiest countries in the world, Iceland saw its banking system collapse during the 2008 financial crisis, leading to the devaluation of the national currency and the beginning of a severe economic recession. Nevertheless, the country's economic base remains strong and the prospect of EU membership is expected to have a stabilising effect on the Icelandic economy. Already, the economy has been gradually making headway out of the crisis, with some encouraging signs of stabilisation and the IMF stabilisation programme on track.

The European Commission has amended the Instrument for Pre-accession Assistance in order to include Iceland as a beneficiary. The aim of the EU financial assistance to Iceland is to support its efforts towards alignment with the EU's legal order, in order to become fully prepared to take on the obligations of membership of the European Union by the time of accession.