* "Bitter experience" of crisis backs case for EU deal
* Icesave talks in more constructive spirit, next in August
* Wants China to buy its fish, encourage tourism to Iceland
By Farah Master
SHANGHAI, July 14 (Reuters) - Iceland is likely to seek accession to the European Union as a means to rebuild its shattered economy, the country's foreign minister Ossur Skarphedinsson told Reuters on Wednesday.
Skarphedinsson, interviewed during a visit to Shanghai, also said Iceland was keen to develop economic links with China, from cooperating on geothermal energy projects to attracting Chinese tourists to the North Atlantic island.
Iceland, a nation of just 320,000 people, is trying to rebuild investor confidence after the 2008 collapse of its top banks and crown currency at the height of the financial crisis.
Its central bank agreed a currency swap with China in June for around $500 million and Skarphedinsson said the possibility of another swap was still open if needed.
The crisis prompted Iceland to apply to join the EU last year, but public support for the move remains low.
Skarphedinsson said it would be very difficult to strike a deal with the EU on Iceland's lucrative fishing areas but that Icelanders would be tempted by the eventual prospect, once in the EU, of qualifying to adopt the euro currency.
"We have had a very bitter experience with our present currency, the krona, long before the crisis, and it is clear to a lot of people that it is impossible to sustain a micro currency in a world that is globalised," Skarphedinsson in an interview.
Formal EU accession talks are to take place at the end of July while more detailed negotiations should start next year, said Skarphedinsson.
ICESAVE; CHINA TIES
Asked about talks over the collapse of the Icesave bank that collapsed in 2008, he said these were more constructive and positive than before, but added: "I would not dare to say that the gap between nations has lessened."
The British and Dutch governments want Reykjavik to repay the $5 billion they paid to Icesave depositors whose funds were frozen in the failed scheme.
Skarphedinsson said he would not speculate when the issue would be resolved, but he expected the next round of talks to be in August.
Officials from the three countries held their first talks earlier this month, after Icelanders overwhelmingly rejected a payment plan in March.
Skarphedinsson also said he had spoken with China's Vice President and Foreign Minister on the possibility of geothermal cooperation in countries like Ethiopia.
"They were very interested in this," he said, adding that China had the financial power and Iceland the expertise to tap places in East Africa with great geothermal potential.
"Of course we are looking to China as the biggest market in future, looking to China as a market for our fish and for getting tourists," Skarphedinsson said.
(Editing by Ruth Pitchford)