Icesave Tremors at Iceland’s Parliament Skip to content

Icesave Tremors at Iceland’s Parliament

The Icesave agreement was fiercely debated at Iceland’s Althingi parliament yesterday. Under the agreement, British and Dutch authorities will grant loans to Iceland so that Iceland can compensate Landsbanki’s Icesave depositors in the UK and the Netherlands.

The headquarters of Landsbanki in Reykjavík. Copyright: Icelandic Photo Agency.

Chairman of the Independence Party Bjarni Benediktsson stated that the MPs of Althingi couldn’t possibly accept the terms of these loans, Morgunbladid reports.

The agreement, which was made public yesterday, includes a provision in case of nonpayment on behalf of Iceland’s state budget.

During such circumstances it would be possible for the loan granters, that is, the UK and the Netherlands, to seize assets held by the Icelandic state, especially its assets abroad.

Magnús Thoroddsen, a Supreme Court attorney, and the court’s former president, told Morgunbladid that he believes this provision can lead to a renunciation of Iceland’s sovereignty and therefore considers it unacceptable.

However, Jóhannes Karl Sveinsson, who is also a Supreme Court attorney, explained that such a provision because of loans between states is conventional.

“It is common in loans to states, funds and state-owned companies. It has nothing to do with the renunciation of sovereignty,” Sveinsson reasoned.

Two separate loan agreements were made, one with the UK and another with the Netherlands.

They are similar in nature apart from a special provision in the agreement with the UK which states that British authorities cannot be held responsible for financial damages caused when they decided to freeze the assets of Landsbanki’s assets in the UK.

Click here to read more about the Icesave agreement and here to read more about the freezing of Landsbanki’s assets.

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