(CNN) -- Financial crisis-stricken Iceland formally applied for European Union membership on Friday, a day after lawmakers narrowly backed a government plan to take the island nation into the economic and political bloc.
Icelandic PM Johanna Sigurdardottir pledged to take Iceland into the EU during April's election campaign.
A copy of the application was submitted to the Swedish government, which currently holds the EU's rotating presidency, Iceland's Ministry for Foreign Affairs confirmed in a statement.
Iceland's economy was devastated by the collapse of the island's banking system last year, leading to the resignation of the country's government.
In elections in April, center left leader Johanna Sigurdardottir was elected prime minister after pledging to take Iceland into the EU.
On Thursday, Iceland's parliament, the Althing, voted in favor of the government plan by 33 votes to 28 with two abstentions.
"This is a historic day for Iceland," Foreign Minister Ossur Skarphedinsson said in a statement.
"As a European nation already deeply integrated into European structures... we now look forward to taking the next logical step, in close cooperation with our European partners."
Welcoming Iceland's application, European Commission President Jose Manuel Barroso said: "The decision of the Icelandic Parliament is a sign of the vitality of the European project and indicative of the hope that the European Union represents. Iceland is a European country with long and deep democratic roots."
Iceland already benefits from a free trade arrangement with European Union member states, latterly as a participating member of the European Economic Area, which was established in 1994, and formerly through a bilateral free trade agreement with the EEC, the EU's predecessor.
But Icelanders have traditionally been skeptical of the benefits of full EU membership, fearing that they would lose some of their independence as a small state within a larger political entity.
At present three other states in southeastern Europe -- Croatia, FYR Macedonia and Turkey -- are candidate countries for EU membership.
"I am pleased that the EU's enlargement agenda may soon extend to Europe's north-western corner as well, with Iceland, a country with deep democratic traditions, in addition to our continued commitment to South East Europe," said Enlargement Commissioner Olli Rehn.