British Law Firm Says Icesave Interest Too High Skip to content

British Law Firm Says Icesave Interest Too High

The British law firm Mishcon de Reya, which submitted its evaluation of the Icesave agreement to the Icelandic parliament’s Budget Committee last weekend, believes the interest rate of 5.55 percent on the loans granted to Iceland by the UK and the Netherlands to compensate the Icesave depositors is too high.

According to RÚV, the law firm finds the agreement unclear and unjust. It is uncertain whether Icelanders can handle the debt burden, which, to a certain extent, involves renunciation of sovereignty, the law firm states.

There is indeed a provision in the agreement stating that it can be reviewed in case Iceland experiences payment difficulties but it seems that the UK is alone in deciding whether there is reason to review the agreement.

Additionally, the final amount of the Icesave claim is unclear and it could increase without the Icelandic government having a say in the matter.

Mishcon de Reya concludes that the new Icesave agreement is at odds with the preconditions introduced by the Icelandic Althingi parliament last summer.

However, it could prove costly to the Icelandic nation if the Icesave agreement is rejected because that might lead to court cases concluding that full repayment be demanded immediately.

Click here to read more about Icesave.

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