Finance Minister Steingrímur J Sigfússon told RÚV that the ruling was disappointing but came as no surprise. The Icelandic government has two months to respond to the ruling, after which EFTA will seek other methods of pressuring Iceland to pay the debt. Negotiations with the British and Dutch governments over repayment terms broke down earlier this year, and a national referendum in Iceland almost unanimously reject an earlier repayment deal. Chaos (and volcanic tephra!) has plagued both governments this year, with the Dutch government collapsing over the war in Afghanistan and the British struggling with their first coalition government in decades.

During the last round of negotiations, it was alleged that the British and the Dutch had pressured the IMF into withholding a second disbursement of loans to Iceland until they received their money. Since then, Iceland has received aid from both the IMF and other Nordic countries. Steingrímur said that it has since been difficult to restart negotiations.

Source: grapevine.is, ruv.is

Image: wikipedia.org