Iceland, UK and Netherlands Conclude Icesave Talks Skip to content

Iceland, UK and Netherlands Conclude Icesave Talks

Icelandic, British and Dutch authorities have reached a conclusion in their negotiations on Icesave, presented by Icelandic Prime Minister Jóhanna Sigurdardóttir and Finance Minister Steingrímur J. Sigfússon at a press conference at parliament yesterday.

Prime Minister Jóhanna Sigurdardóttir. Photo by Geir Ólafsson.

The new agreement will be signed today, Morgunbladid reports.

The governments of Iceland, the UK and the Netherlands had to resume negotiations after the Icelandic parliament, Althingi, introduced preconditions to the original agreement on Iceland’s state guarantee on the loans provided by the British and Dutch so that Iceland could compensate Landsbanki’s Icesave depositors in their countries.

One of these preconditions was a time limit on the state guarantee until 2024, meaning that if Iceland had not repaid the loans by then, they would be written off. British and Dutch authorities could not agree to that precondition and no time limit is included in the new agreement.

However, it is expected that Iceland will have finished repaying the Icesave loans by 2024. The amount of repayment will be six percent of accumulated economic growth from 2008, but not two to four percent as earlier decided.

The agreement does not determine whether Iceland can seek its legal rights in terms of their obligation to cover the Icesave deposits later on, which was one of the preconditions introduced by Althingi.

Finance Minister Sigfússon told Stöd 2 that the Icelandic negotiation committee had “fought hard” for maintaining that precondition.

PM Sigurdardóttir said the agreement was acceptable and that it was impossible to take it any further. “It is absolutely clear in our minds that the Icelandic nation has a greater interest in completing this issue—as far as we could take it—than to leave it unsolved.”

The PM expects that now, as the matter has been concluded, the International Monetary Fund will review the economic stabilization program for Iceland in two weeks, after which Iceland will receive ISK 123 billion (USD 990 million, EUR 620 million) in loans to strengthen the country’s foreign currency reserves.

Then the policy rate can be lowered and the currency restrictions abolished, which would have a positive impact on the stability pact, the PM added.

Both Sigurdardóttir and Sigfússon were optimistic that the new agreement will be approved by parliament as the parliamentary parties of both the Social Democrats and the Left-Greens have declared their support for it.

However, representatives of the opposition parties have declared that they find the conclusion of the Icesave dispute unacceptable, arguing that the preconditions Althingi had introduced are being annulled. They intend to vote against it.

Click here to read more about Icesave.

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