The Dutch Threaten Iceland in Icesave Dispute Skip to content

The Dutch Threaten Iceland in Icesave Dispute

icesave-logoThe Dutch Minister of Finance Jan Kees de Jager announced yesterday that the Netherlands will use their veto right to block Iceland’s membership to the European Union if the Icesave dispute is not resolved.

In his address to the Dutch parliament, de Jager said he believed Iceland’s admission to the EU is dependent on a solution to the dispute, a solution which involves that Iceland pay the UK and the Netherlands the Icesave debt in full. He stated the Netherlands are entitled to EUR 1.3 billion (ISK 214 billion, USD 1.9 billion) with interest, reports.

De Jager added that he will make sure that the International Monetary Fund pressures Iceland to pay the Icesave debt, stressing that the dispute is now in the hands of the EFTA Court.

In a letter sent by the minister to the speaker of the Dutch parliament yesterday, he said he is aware that with time the Landsbanki bankruptcy estate will probably be able to cover around 90 percent of the Icesave debt but nonetheless the dispute will have serious consequences for financial markets.

He is therefore hoping both the EFTA Surveillance Authority (ESA) and the EU will find a good solution to the dispute, as he stated in the letter.

The Dutch media reported on the minister’s comments. Some speculated that a court case can be avoided as the Landabanki bankruptcy estate can cover almost the entire debt and therefore the Icesave dispute shouldn’t be an issue in the Iceland-EU membership talks.

Meanwhile, Prime Minister of Sweden Fredrik Reinfeldt told his Icelandic counterpart, Jóhanna Sigurdardóttir, in a conversation on the outcome of the Icesave referendum and its consequences that Sweden would support Iceland in its economic stabilization program with the IMF, Fréttabladid reports.

It is hoped that Sweden’s declaration of support has significant weight in Iceland’s talks with the rating agencies, especially Standard & Poor’s, on postponing their new credit ratings for the Icelandic state.

According to Fréttabladid’s sources, the talks are going well, although President of Iceland Ólafur Ragnar Grímsson’s appearance on Bloomberg, where he criticized the rating agencies’ work methods, did not exactly further Iceland’s cause.

Lars Christensen, the director of the Danske Bank research department, who presented the bank’s report on the Icelandic economy at Íslandsbanki yesterday, said attitudes as revealed on Bloomberg are not constructive towards foreign financial markets, reports.

Christensen stated Icelandic officials shouldn’t appear in the foreign media and comment that the rating agencies are stupid; it is better to discuss matters in a more dispassionate manner, he reasoned.

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