PM: New Icesave Deal Made If It Cripples Iceland Skip to content

PM: New Icesave Deal Made If It Cripples Iceland

Prime Minister of Iceland Jóhanna Sigurdardóttir stated yesterday that the agreement between Iceland, the UK and the Netherlands on Iceland’s obligations towards Landsbanki’s Icesave depositors, assumes that it will be reviewed in case the state’s debt capacity is questioned.

Prime Minister Jóhanna Sigurdardóttir speaking at parliament at a different occasion. Photo by Páll Kjartansson.

The PM explained that the negotiation committee’s starting point had been that the nature of the loan period, terms and interests should not prove too difficult for the state budget to handle, Morgunbladid reports.

“It is difficult to define [debt capacity] as some percentage, let alone a fixed size,” added Minister of Finance Steingrímur J. Sigfússon. “It is always something that has to be looked at in connection with the outlook of the national economy and the state budget long-term.”

“Our opponents understand that this has to be manageable,” Sigfússon stated, explaining that with the review provision of the Icesave agreement, the Icelandic state will be saved from bankruptcy in case the ability to pay decreases significantly.

The Icesave agreement is currently being debated in Iceland’s parliament.

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