Icesave to meet Dutch obligations

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Iceland's Prime Minister Geir Haarde says his government will do everything possible for the failed Icesave bank to meet its obligations with Dutch depositors.

Speaking on a Dutch television programme, the prime minister stopped short, however, of guaranteeing full reimbursement of deposits trapped in the collapsed bank. Mr Haarde underlined that his government has passed a law giving savers preferential treatment when a bank fails. He said Iceland's crisis is the worst since 1914.

Earlier this week, Icesave announced it could no longer meet its obligations. Some 120,000 Dutch nationals have savings at the Icelandic bank. Iceland guarantees the first 20,000 euros but it's not clear if the country is currently able to honour that pledge. On Thursday, Dutch Finance Minister Wouter Bos reassured Dutch savers that they will get their money back "one way or another" up to a maximum of 100,000 euros. A Dutch delegation is currently in Iceland to discuss the situation.

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