The mayor of Reykjanesbær, Southwest Iceland, Kjartan Már Kjartansson, compares the chain of events at a town council meeting yesterday to an American movie, mbl.is reports. At the very last minute, the creditors of the heavily indebted town, which was about to vote on a proposal to ask the central government to take over its finances, announced they were ready to negotiate with the town council.
Only a few minutes before the town council meeting was to begin, a letter arrived from those creditors who had not signed an agreement with the town before the given deadline on Wednesday, last week. Thus, the council members’ plan to ask the Ministry of the Interior to appoint a financial control board to take over the town’s finances was aborted.
Reykjanesbær, population 15,000, owes over ISK 40 billion (USD 320 million, EUR 284 million,).
“We thought it was right to accept the request. We’ll take two weeks to find out whether there is a real basis for agreement with this group or not,” Kjartan stated.
He continued, “This was just like an American movie. The letter arrived five minutes before the decisive moment.”
The creditors are 18, including banks, pension funds, bankruptcy estates, and property rental companies. Their negotiations with the town of Reykjanesbær have been going on for the past 18 months.
No one knew what appointing a financial control board would have entailed, since such a move by a municipality this large is unprecedented in Iceland.