According to the Central Bank of Iceland’s evaluation of the agreement between Icelandic, British and Dutch authorities on Landsbanki’s Icesave deposits, the Icelandic state treasury can honor its obligations unless further economic setbacks occur.
Photo by Páll Stefánsson.
Also, in order for the state treasury to honor its foreign commitments, economic growth must be emphasized in the coming years, Morgunbladid reports.
Central Bank governor Svein Harald Oeygard and the bank’s legal experts presented the evaluation, of which Morgunbladid now has a copy, to the Icelandic parliament’s budget committee on Monday. Its final version will be presented today.
The evaluation also reveals that the foreign commitments of the Icelandic national economy will peak in 2010 when they amount to ISK 2,953 billion (USD 23 billion, EUR 16 billion)—more than 200 percent of the gross domestic production (GDP) this year.
The Central Bank has performed an analysis of how much the value-added tax (VAT) has to be increased to finance the entire Icesave debt so that the state treasury’s earnings will be higher than the total payment for Icesave by the end of 2025.
The evaluation is dependent on the reclamation of Landsbanki’s assets, the currency exchange rate and the development of economic growth.
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