Home News Dutch minister links Iceland’s EU bid to bank loans

Dutch minister links Iceland’s EU bid to bank loans

Published on July 22, 2009

The Hague – Dutch Foreign Minister Maxime Verhagen on Tuesday linked Iceland's bid to join the European Union with an agreement to compensate for losses stemming from bailed-out Icelandic bank Icesave.

Verhagen urged Iceland to approve a draft deal under which the island nation will pay EUR 1.3 billion (USD 1.8 billion) to the Netherlands and EUR 2.6 billion to Britain.

The Netherlands and Britain compensated savers who had money with Icesave when it went bust and was nationalised by the Icelandic government in October last year.

"It is absolutely necessary that the agreement is approved," said Verhagen in a statement issued after a talk with his Icelandic counterpart Ossur Skarphedinsson.

"A solution to the problem of Icesave would encourage rapid consideration of Iceland’s bid to join the European Union," he added. "It would show that Iceland takes European directives seriously."

The draft deal, which can still be rejected by the Icelandic parliament, would foresee the money being paid by Iceland with interest between 2016 and 2024.

More than 200,000 British clients and 120,000 Dutch clients had their Icesave accounts frozen during the nationalisation of Landsbanki, the parent group of the online banking unit.

On 16 July, Iceland’s parliament voted in favour of applying for EU membership in the wake of the country’s economic meltdown, opening the way for negotiations to begin with the 27-nation bloc.

AFP / Expatica