First, the majority of Iceland does NOT want to join the EU - and the Mackerel dispute is not helping, since Iceland's main fear of the EU is due to the fishing policies.

To pick up the Europe, Iceland would have to lower their national debt, among other things. However, that's not an restriction to join the EU.

If you are referring to the Icesave dispute, then Iceland has been cleared by the EFTA court: http://en.wikipedia.org/wiki/Icesave_dispute#EFTA_Court_clea...