An estimated number of 3,000 people gathered in front of the Althingi parliament at Austurvöllur square in central Reykjavík yesterday to protest the Icesave agreement in its current form, urging MPs not to approve it.

Protests on Austurvöllur in October 2008. Copyright: Icelandic Photo Agency.

The demonstration was organized by the Indefence group, which earlier ran the campaign “Icelanders are not terrorists,” in response to the UK government’s use of the anti-terrorism legislation to freeze Icelandic assets in the UK.

“We are satisfied with the meeting. It is important that the nation stands together,” Ólafur Elíasson, one of Indefence’s spokespersons, told Fréttabladid. The group described yesterday’s event as a meeting for people to show solidarity.

The Indefence group is now preparing to bring its cause to the attention of foreign media. “We were half promised that if the meeting would be big then we would get to write and translate articles for foreign newspapers,” Elíasson said.

Some MPs and other well-known people attended the demonstration yesterday, among them former Prime Minister and Central Bank governor Davíd Oddsson.

According to Fréttabladid’s sources, a cross-political agreement on the government’s Icesave proposition is unlikely after the parliament’s Economic and Tax Committee’s meeting ended in disagreement last night.

The proposition includes state guarantee on loans from the UK and the Netherlands to the Icelandic Depositors’ and Investors’ Guarantee Fund so that Iceland can compensate Landsbanki’s Icesave account holders in these countries.

The committee assembled five times yesterday and Minister of Finance Steingrímur J. Sigfússon joined its members in a meeting after midnight last night, Morgunbladid reports.

The opposition parties want to include a disclaimer in the agreement that no payments are made to the UK and the Netherlands if there is no economic growth in Iceland.

They also want to limit annual payments to 2.2 percent of gross domestic product (GDP), while the government parties have suggested 3.5 percent.

Prime Minister Jóhanna Sigurdardóttir said yesterday that she hoped a solution could be reached on disclaimers that could fit within the current Icesave agreement, while, according to Fréttabladid, the opposition wants a new agreement altogether.

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