REYKJAVIK, Dec 6 (Reuters) - Iceland's prime minister said on Saturday the crisis-hit country could start talks on joining the European Union if they were on the right terms.
"I feel it's quite possible that we take this issue a step further, that is to ask for membership talks on terms that are agreeable to us," Haarde told state radio.
Haarde used to be a staunch opponent of EU membership but has softened his stance since the country's worst-ever financial crisis blew up in October.
He said on Nov. 14 a commission would look into EU membership and that his Independence Party would hold its party conference in January instead of October 2009, to discuss the issue of joining the 27-nation bloc.
"The terms would have to take our national interest and our natural resources into full consideration. If we were able to get an agreement on such terms, then that would be something we would have to consider -- but the benefits of membership would have to be very clear," he said.
"In the end, when this issue is resolved, however long that may take, people will have to say either yes or no."
Many Icelanders have in the past been wary of EU membership, worrying that it could hurt the island's important fishing sector and its independence.
But the financial crisis has made most more favourable toward the EU in the hope that adoption of the euro could be a cure for economic misery.
The Icelandic economy is expected to contract 10 percent next year and unemployment is set to soar.
Brussels has said any application by Iceland to join could move quickly as the country has already adopted many EU laws.
Haarde said he did not want to make any recommendations on the issue while his party was weighing the matter.
He told Reuters last week one option would be unilaterally adopting the euro without joining the bloc. The European Central Bank opposes such moves. (Reporting by Omar Valdimarsson via Stockholm newsroom; additional reporting by Adam Cox in Stockholm; editing by Andrew Roche)