By Oana Lungescu
BBC News, Brussels
Officials say Iceland's hopes to join the bloc within three years are realistic
The European Union has taken the first step towards accepting Iceland as part of the 27-member bloc.
EU foreign ministers meeting in Brussels have asked the European Commission to begin assessing the country's readiness for membership.
Entry talks with Iceland, which applied to join the EU on Thursday after being hit hard by the global financial crisis, are expected to proceed fast.
But that could lead to frustration among other applicants in the Balkans.
Seven countries from the region are currently waiting in the wings. Croatia and Turkey started accession talks in 2005.
Iceland applied to join the EU only last week, trying to bolster its battered economy and reassure foreign investors.
As part of a club called the European Economic Area, this tiny island in the North Atlantic already applies about two thirds of EU laws.
Icelanders can also travel without restrictions across the EU.
The bid is backed by other Nordic countries such as Sweden, which holds the EU's rotating six-month presidency.
But Swedish Foreign Minister Carl Bildt denied on Monday that Iceland would get preferential treatment.
"There's no fast-track for Iceland, but there's obviously a rather shorter track for Iceland because they're already part of the single market and the Schengen Area," he said.
"But we'll take it one step at time and as you know there are other applications on the table as well," he added.
"There is the Albanian one, although we are not quite there yet and there might be others. Enlargement remains an important issue."
Candidates for membership: Croatia, Macedonia, Turkey, Iceland
Potential candidates: Albania, Bosnia-Hercegovina, Montenegro, Serbia
The EU wants to reassure Balkan states they will not be forgotten, as there is concern that delays could fuel political instability.
But Albania, which applied to join in April, is still waiting for an answer because of uncertainty over the outcome of last month's election, which saw a narrow victory for the governing Democratic Party and allegations of fraud by the opposition Socialists.
Montenegro waited for five months before its application was handed to the European Commission for an assessment.
Meanwhile, entry talks with Croatia, Turkey and Macedonia are blocked because of rows with neighbours and widespread fears of expansion in Germany and other EU countries.
Officials say Iceland's hopes to join the bloc within three years are realistic, provided of course Icelanders themselves agree in a referendum, and the latest poll shows they are evenly split.