Icesave Deal Debated in Iceland’s Parliament Skip to content

Icesave Deal Debated in Iceland’s Parliament

The agreement between Icelandic, Dutch and British authorities on Iceland’s obligations towards Landsbanki’s Icesave depositors was subject to heated debate inside Iceland’s Althingi parliament yesterday.

Inside Iceland’s Althingi parliament. Copyright: Icelandic Photo Agency.

Minister of Finance Steingrímur J. Sigfússon said the conclusion is acceptable considering that already in October an agreement had been made with the Netherlands which was much less favorable for Iceland, Fréttabladid reports.

In fact, the negotiation had been about undoing mistakes that took place during the confusion surrounding the economic collapse in October last year, Sigfússon claimed.

However, the opposition parties stated the agreement was a mistake. Chairman of the Progressive Party Sigmundur Davíd Gunnlaugsson called it “despicable gutlessness” not to take the Icesave dispute to court.

Chairman of the Independence Party Bjarni Benediktsson criticized the government for hiding behind the decisions made by their predecessors.

Not just the opposition disapproves. Daniel Gros, the managing director of the Center for European Policy Studies in Brussels, told Morgunbladid that the interest rates are far too high.

“I believe these interests create too much of a risk for Iceland and don’t consider this a good agreement for the country. I don’t think any other country in the world has as high foreign debts than Iceland after this,” Gros commented.

According to the agreement, the Iceland Compensation Scheme will pay approximately ISK 655 billion (USD 5.1 billion, EUR 3.7 billion) to the UK and the Netherlands over the next 15 years.

The loan carries an interest rate of 5.5 percent and is interest-only for the first seven years, during which period only the assets of the old Landsbanki will be used to cover the debt.

Click here to read more about the Icesave agreement.

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