New British and Dutch Post-Icesave Position on Iceland Skip to content

New British and Dutch Post-Icesave Position on Iceland

icesave-logoThe attitude of British and Dutch authorities towards Iceland has changed since the new Icesave legislation was vetoed in the national referendum on April 9. The International Monetary Fund (IMF) finds it fitting for the dispute to be concluded in court.

Minister of Economic Affairs Árni Páll Árnason and Minister of Finance Steingrímur J. Sigfússon attended meetings in Washington DC last weekend with IMF employees, the representatives of rating agencies and British Chancellor of the Exchequer George Osborne, reports.

“We have been fairly successful in explaining that the influence of the economic policy has been good and that there are no substantial arguments for the outcome of the national referendum last weekend impacting Iceland’s ability, intent or reliance to honor its obligations,” Árnason said.

A number of people were concerned that rejecting the Icesave agreements with the British and Dutch authorities on a state guarantee on the payment of Landsbanki’s debt to the Icesave depositors in their respective countries might have serious consequences for Iceland’s diplomatic relations.

“But as the situation appears today it is clear that this matter does in no way threaten stability in the Netherlands and the UK,” Árnason stated. The natural course of action is to resolve the dispute in court and both the IMF and the British and Dutch governments have shown increased understanding for that point of view, the minister added.

The Icelandic ministers also met with the undersecretary of the Dutch Ministry of Finance last weekend; a letter sent by Finance Minister Jan Kees de Jager last week saying that the Dutch would use their influence within the IMF and the European Union to make sure the Icesave debt is paid raised considerable attention.

“We have not noticed that the British or Dutch are in any way interested in hindering the restoration of Iceland or disrupting the progress of Iceland’s economic program within the IMF,” Árnason stated.

President of Iceland Ólafur Ragnar Grímsson has publicly criticized rating agencies for announcing they would downgrade Iceland’s credit rating to junk if the Icelandic nation would vote ‘no’ in the Icesave referendum.

The Icelandic ministers discussed the matter with representatives of the rating agencies. “They believed before the national referendum that the credit rating would be lowered given that the faith in Iceland would decrease and it would become more difficult for us to obtain funding,” Árnason explained.

“However, now we see that the development of the markets in the past week has not been impacted by turmoil with trade with Iceland’s credit default swap and we have obtained foreign investment in one Icelandic bank,” Árnason said.

Yesterday, the president commented that the Dutch finance minister was “odd” in an interview on an Icelandic radio station.

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