Home News Iceland reaches Icesave deal with Britain

Iceland reaches Icesave deal with Britain

Published on 18/10/2009

Reykjavik - Iceland has reached a deal with the British and Dutch governments to reimburse them for compensating savers who lost money in the collapse of Icesave bank, Icelandic media reported Sunday.

"A conclusion has been reached in the Icesave negotiations between the Icelandic, British and Dutch governments," Morgunbladid said in its online edition, citing unidentified sources close to the talks.

Iceland’s parliament approved in August a controversial deal to pay back EUR 3.8 billion (USD 5.4 billion) to the British and Dutch governments for the compensation they forked out to disgruntled savers from Britain and the Netherlands.

However, in order to pass the deal through the Icelandic parliament, Prime Minister Johanna Sigurdardottir negotiated several amendments that required the approval of London and The Hague.

The British and Dutch governments rejected one of the amendments, regarding the expiry date of the state’s guarantee for the repayment, set for 2024 regardless of whether the amount was paid in full.

According to Morgunbladid, the Icelandic government has now agreed that its state guarantee will not expire in 2024 and it will continue to make payments until the debt is paid in full.

The change needs to be submitted to Iceland’s parliament for approval.

The paper said Sigurdardottir’s coalition government was due to discuss the agreement on Sunday, and parliament’s budget committee will decide when parliament will hold a debate and vote on the issue.

"The leaders of the coalition parties believe they have a majority for the changes," Morgunbladid stated.

A cabinet minister from Sigurdardottir’s junior coalition partner the Left Greens resigned in September over the controversial deal.