Solution on Icesave Dispute Seems To Be in Sight Skip to content

Solution on Icesave Dispute Seems To Be in Sight

By Iceland Review

It is hoped that an agreement will be reached today or in the coming days on how account holders of Landsbanki’s Icesave in the UK and the Netherlands, and account holders of other Icelandic banks in Europe will be compensated. An Icelandic delegation is currently in Brussels working to that end.

The delegation is comprised of five officials who are negotiating on behalf of the Icelandic authorities. They met with French representatives yesterday, the current leading member state of the European Union, who are interposing between Iceland, Britain, the Netherlands and Germany, Fréttabladid reports.

“The discussions were characterized by good will and amicability,” said Kristján Kristjánsson, press representative for Iceland’s Prime Minister Geir H. Haarde, adding that the negotiations are at a sensitive stage.

Once a solution has been reached between the Icelandic delegation and the French representatives, it will form the basis for Iceland’s negotiation with British, Dutch and German authorities.

The Icelandic delegation has been informed that Iceland cannot expect EU membership if Icelandic authorities choose to ignore the union’s regulations and refuse to compensate foreign account holders of Icelandic banks.

According to Morgunbladid, if an agreement is reached that lessons Iceland’s obligation to compensate account holders to the extent stipulated in the EU Deposit Guarantee Schemes Directive, it could lead to a run on banks in Europe.

It is hoped that once an agreement on the Icesave deposits and other deposits in Icelandic banks in Europe has been reached, the International Monetary Fund (IMF) will decide on whether or not to grant Iceland an emergency loan as requested, as early as the beginning of next week.

The IMF board has continuously delayed their decision on Iceland’s request, apparently because of the Icesave dispute.

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