Iceland has sent a positive signal by deciding to lift labor market restrictions for Bulgarians and Romanians in what was a largely expected move.

Starting January 1, Bulgarians and Romanians will no longer need to get special residence and work permits to live and work in Iceland, the IceNews website reported.

The regulation is in accordance with the provisions of the European Economic Area and the Icelandic legislation.

Those who have residence and work permits will not have to renew them when they expire, while those moving into Iceland simply need to register their stay with the National Registry.

Iceland applied to join the European Union on 16 July 2009. Negotiations formally began 27 July 2010.

Iceland is already heavily integrated into the EU market as it is part of EU's internal market through the European Economic Area and the Schengen Area. Iceland, together with Norway, Switzerland, and Liechtenstein is a member of the European Free Trade Association.

Iceland's move follows Italy's decision to give workers from Bulgaria and Romania unfettered freedom of movement.

Nine other EU members have decided to maintain these restrictions, with many citing the impact of the crisis and high jobless rates.

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