Iceland’s Government and Opposition Agree on Icesave Skip to content

Iceland’s Government and Opposition Agree on Icesave

The government of Iceland and the opposition in Iceland’s parliament reached an agreement yesterday on a discussion point to use in renegotiations with British and Dutch authorities on the Icesave obligations.

Minister of Finance Steingrímur J. Sigfússon is optimistic that the dispute will be resolved but opposition leaders said it is too early to celebrate, Morgunbladid reports.

Chairman of the Independence Party Bjarni Benediktsson said the next project is to get the message across to British and Dutch authorities that Icelanders are not prepared to sign agreements that aren’t supported in Iceland.

“We will not have achieved anything until our negotiating partners have declared their intent to be fair and understanding towards our points of view,” Benediktsson said, adding that he is satisfied with how matters have developed between the government and the opposition.

A cross-political agreement in Iceland was a condition for renegotiations, as British and Dutch authorities had announced.

The agreement between the government and opposition includes that the advice of Lee C. Buchheit will be sought, an American expert on debts of states and national obligations, who is a co-owner of the law firm Clearly Gottlieb Steen & Hamilton in New York. He will arrive in Iceland today.

“It is important to recruit all the advisors and geniuses people think might be able to help,” Sigfússon said when asked whether he was satisfied with Buchheit’s participation.

According to Fréttabladid, it is now being discussed that Iceland begin repayment of the Icesave loans from the UK and the Netherlands sooner than 2016, as anticipated in the current agreement.

The goal is to lower the cost of interest rates, because although repayment won’t begin until 2016, interest rates will be calculated from 2009.

British and Dutch authorities demand that the principal of the loans be paid in full and therefore Icelandic authorities are working out how the entire sum can be lowered through other means.

There are two ways to lower the cost of interest rates, either by lowering the interest rate percentage with better loan terms or by starting repayments sooner than originally planned, which would save extensive amounts.

The treatment of Landsbanki’s assets is key in that regard. It is now being discussed how quickly they can be sold without diminishing their value.

Click here to read more about Icesave.

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