Iceland sharply divided on joining E.U. amid debt crisis To understand just how pervasive the debate has become in this small island nation, it's best to keep walking past the stone Parliament building downtown and forgo the prime minister's office up the hill. The politicians have settled into their trenches, arguing the issue long enough and loud enough to make any Washingtonian feel at home. It is in the streets where one realizes how sharply the subject has divided this country of 318,000 people and forced fundamental questions about what sort of future Icelanders want. "Iceland isolates itself if we don't participate," says a 24-year-old bouncer at the English Pub, where a guitar player is belting out covers of Billy Joel and Prince. The euro is a more stable currency. "I don't want the euro, hell no," says a 49-year-old woman selling burgers and fries from a food truck in a central square. The countries that have the euro, it's going pretty badly. Taxi drivers. Tattoo artists. Barbers. Baristas. Nearly everyone has an opinion, and very often a strong one. "It's a very hard topic; it's very divisive," said Baldur Thorhallsson, a political science professor at the University of Iceland. It's about national identity, and that's why the debate is so heated. It's a question of where we belong. There is an irony hanging over the debate, of course. Three years ago, Iceland's European neighbors, along with much of the world, looked on in dismay as the island's once-booming economy imploded, the result of a banking system that had grown far too large and far too reckless. Now, as Iceland shows glimmers of recovery and Europe finds itself wrestling with a debilitating debt crisis, many Icelanders look at the situation with alarm and disdain. And Iceland is not alone. On Sunday, Croatians voted to join the E.U. next year despite reservations among many citizens about a loss of sovereignty and the debt troubles in the euro zone. Here, those who favor joining the E.U. - a group that includes Prime Minister Johanna Sigurdardottir - argue that Iceland would benefit from a larger community, primarily by gaining much-needed stability in its currency. Iceland's krona has long suffered from precipitous booms and busts and has little appeal outside the country, especially after the recent crisis. Those against joining the E.U. - a group that includes former prime minister Geir Haarde - note that the euro has done little to stave off instability in Europe and argue that allowing the krona to fall in value helped hasten Iceland's recovery by making its exports cheaper. Many critics also note that Iceland could lose control over the policies that govern fishing off its coasts, a particularly sensitive issue because it involves one of the country's chief exports.