New Icesave deal passes second parliament vote

4th February 2011, Comments 0 comments

Iceland's parliament on Thursday voted again to approve a new deal reached with London and The Hague to repay money lost in the collapse of the Icesave bank.

In the second of three required rounds of approval, parliament passed the new Icesave bill with 40 votes in favour, 11 opposed and six members of parliament abstaining, the Morgunbladid daily reported on its website.

The new deal, reached with British and Dutch negotiators in December, must be debated three times in parliament before it can become law.

The clear support shown in the second round Thursday makes it more likely that President Olafur Grimsson, who early last year vetoed the previous deal and put it to a referendum, will give his approval, paving the way to a third and final parliamentary vote.

At the March, 2010 referendum, 93.2 percent of Icelanders rejected the deal.

The new deal however is viewed far more positively, and a recent poll showed nearly 57 percent of Icelanders want parliament to adopt the bill.

The new accord stipulates that Reykjavik repay in full the 3.9 billion euros (5.3 billion dollars) which Britain and the Netherlands spent compensating around 340,000 of their citizens hit by Icesave's collapse in October 2008.

Under the deal, Iceland would be able to repay the money very gradually between 2016 and 2046 at a 3.0-percent interest rate for the 1.3 billion euros it owes The Netherlands and at a 3.3-percent rate for the rest it owes Britain.

In the previous deal rejected at the referendum, Iceland had to repay the Netherlands and Britain between 2016 and 2024 at a 5.5 percent interest rate.

© 2011 AFP

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