By Johan Ahlander and Tom Little
REYKJAVIK, Aug 30 (Reuters) - The "no" camp moved further ahead early on Sunday in Iceland's referendum on whether to start accession talks with the EU, as five of six constituencies reported final results in the closely fought race, broadcaster RUV said.
Based on the first 188,500 votes counted of an eligible 270,000 from Saturday's referendum, 52.5% were against the government's proposal to restart negotiations, while 47.5% were in favour, RUV reported. There was
no information available on turnout.
Both districts in the capital, Reykjavik, were among those reporting final results, with only the southwest remaining, according to RUV.
A reliable final result might not be available until midday (1200 GMT), election officials said. Voting ended at 10 p.m. on Saturday, kicking off a complex operation to bring ballots from towns and rural polling stations by plane, boat and car.
OLD QUESTIONS, NEW URGENCY
Though a "yes" vote would open up discussions with Brussels, under Icelandic law, there would have to be a second referendum, likely several years later, on whether to join the EU.
On Friday, a Gallup poll indicated a narrow majority opposed the government's proposal of reopening negotiations on joining the European Union, a shift from earlier surveys that pointed to a narrow lead for supporters of renewed talks.
"Yes" campaigners have said joining the bloc could ease high interest rates and offer more security in a world unsettled by war in Ukraine and U.S. President Donald Trump's rhetoric about annexing fellow Arctic island Greenland.
"No" campaigners have argued that EU membership would threaten the island's sovereignty and fishing waters.
The referendum campaign has fuelled debate about Iceland's place in the world, Prime Minister Kristrun Frostadottir told reporters after casting her ballot in the capital on Saturday.
"This is a great day, we've been waiting for this for years to be able to have a vote," Frostadottir said, adding that her government would continue its work regardless of the outcome.
Iceland first applied to join the EU in 2009 amid a financial crisis that hit the country's small, exposed economy. A Eurosceptic government ended talks in 2013.
Geopolitical turmoil including war in the Middle East and U.S. import tariffs has brought urgency to an issue Icelanders have debated on and off for decades.
Iwo Egill Macuga Arnasson, a 19-year-old student casting his ballot in Reykjavik, said he voted in favour of negotiations. "I think this will influence my life a lot, whether we join the European Union or not," he told Reuters.
INTEREST RATES AND COST OF LIVING
Debate inside Iceland has focused more on interest rates, fishing rights and the cost of living than on security.
Iceland has grappled with persistently high inflation and interest rates that have made mortgages expensive. Supporters of a "yes" vote have said EU membership, and possibly adoption of the euro, could bring relief. Iceland's central bank interest rate is 8%, compared with 2.25% at the European Central Bank.
"It would not solve Iceland's structural faults, but it could become a catalyst to a more healthy economy," said chief economist Vilhjalmur Hilmarsson at Viska, one of Iceland's largest labour unions.
Opposition leader Gudrun Hafsteinsdottir, who has led the "no" campaign, has argued the economic case is overstated. "These are not problems that Brussels will solve for us. These are problems that Icelandic politicians must solve," she said.
Voter Ragnhildur Skarphedinsdottir, 70, said Iceland was managing well on its own and that she was voting "no".
"By staying independent as we are, we look brightly to the future," she said before casting her ballot in Reykjavik.
Under EU rules, fishing quotas are based on historical fishing patterns, among other factors. Some officials have argued that Iceland would therefore retain control of its waters, since no EU country has fished there for decades.
Hafsteinsdottir argues otherwise. "I know that the European Union will come up with some promises of some flexibility, especially in the beginning, but we know that it will not be for good."
A foreign ministry memo estimates accession talks could start by the end of 2026 and take 18 to 24 months if Saturday's vote favours reopening negotiations.
(Reporting by Tom Little and Johan Ahlander in Reykjavik and Stine Jacobsen and Louise Rasmussen in Copenhagen; Writing by Stine Jacobsen; Editing by Terje Solsvik, Ros Russell, David Gregorio and Christopher Cushing)
