My idea is basically that the agreement is made individually by the candidate, with his/her electorate.

The force of the agreement need not be "legal", but simply administrative. Any Member voting outside his/her remit would have their vote cancelled, and the reason published.

And that's highly amusing, Arjay. You really don't like research, do you...?!

>>Iceland is the mouse that roared.<<

The phrase "The Mouse That Roared" was coined for a 1959 movie:

"The Duchy of Grand Fenwick decides that the only way to get out of their economic woes is to declare war on the United States, lose and accept foreign aid. They send an invasion force to New York (armed with longbows) which arrives during a nuclear drill that has cleared the streets. Wandering about to find someone to surrender to, they discover a scientist with a special ultimate weapon that can destroy the Earth. When they capture him and his bomb they are faced with a new possibility: What do you do when you win a war?"

http://www.imdb.com/title/tt0053084/synopsis

I doubt the Icelandic people would thank you for the comparison.

>>Greece Italy and the rest of the PIGS should do likewise.<<

Sadly, they cannot. The only reason Iceland could get away with it was because they were so minuscule as to be irrelevant. None of the other countries you mention could do the same without inflicting irreparable damage on their own people.