Iceland set to vote on Dutch compensation deal

28th August 2009, Comments 0 comments

All but one of the parties in Iceland's parliament are in favour of the controversial compensation deal of repaying EUR 3.8 billion to the British and Dutch government.

Reykjavik – Iceland's parliament began Thursday its third and final debate on a controversial deal to pay back billions of euros lost by British and Dutch savers in the collapse of Icesave bank.

Members of parliament said they did not know how long the debate would last but the vote was expected to take place on Friday at the latest.

After weeks of negotiations, Social Democratic Prime Minister Johanna Sigurdardottir on 15 August obtained the approval of a majority of MPs for the accord reached with Britain and the Netherlands in early June.

The deal cannot go through without parliament's formal approval.

All of the parties in parliament, with the exception of the Progressive Party, are in favour of the deal, which foresees the payment of EUR 3.8 billion by 2023 to the British and Dutch governments for the compensation they forked out to disgruntled savers.

The debate has dragged on in parliament for weeks as the general public largely opposes the deal amid fears it will plunge crisis-ridden Iceland into poverty for several decades.

But it finally won the approval of most MPs following amendments that restrict payments to a percentage of GDP growth and assurances that Iceland's natural resources cannot be used as collateral.

Icesave, an online subsidiary of the Landsbanki bank which had to be rescued in October 2008, attracted over 320,000 British and Dutch savers due to its high interest rates.

But they lost their savings when accounts were frozen during last year's credit crunch.

The British and Dutch savers were partially compensated by their own governments, who then turned to Reykjavik looking for the money paid out.

AFP / Expatica

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