Crisis Report Used Against Iceland in Icesave Case Skip to content

Crisis Report Used Against Iceland in Icesave Case

In referencing the Icelandic parliament’s Special Investigative Commission (SIC) report, the European Commission (EC) claims in a statement submitted to the EFTA Court one week ago that Iceland could have controlled the size and impact of the banking collapse.

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The SIC report. Photo by Geir Ólafsson.

Therefore one cannot speak of force majeur in the case of Landsbanki’s Icesave deposits, the EC reasons, Fréttablaðið reports.

Oral pleadings in the Icesave case will take place on September 18.

The EC’s statement supports the arguments of European Surveillance Authority (ESA) in its case against Iceland.

The statement rejects Iceland’s reasoning that one cannot expect states to have built-in mechanisms that can handle the collapse of the entire economy

The EC states that even though the world’s financial crisis did not originate in Iceland, the collapse of the banks in Iceland was not caused by outside circumstances.

The EC references the statements of the SIC that the great extent of the collapse was caused by the lack of preventive measures in the banking sector and by mistakes and negligence of Icelandic authorities.

The EC points out that no actions were taken even though the banks’ balance sheets had amounted to nine times the GDP of Iceland.

Already in 2006, awareness was raised of the fact that the private banks had outgrown the Central Bank of Iceland, yet nothing was done in response.

Click here to read more about Icesave.

ESA

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