News and opinion site Eyjan today published an article saying that the recent change in government in the UK has had no apparent influence on the country’s position regarding the “alleged” (their words, not ours) obligation that is Icesave. This is not an unexpected announcement, but rather an official confirmation.

Incumbent Conservative prime minister David Cameron told parliament today that Iceland should pay the United Kingdom the sum of £2.3 billion (€2.7 billion, $3.4 billion), and that British authorities intend to use Iceland’s application to the EU to ensure a favourable result for Britain is reached.

Cameron delivered a report from the EU summit talks to parliament, which were held last Thursday. At the summit, it was decided that accession talks with Iceland could go ahead. He said that Britain is in favour of EU expansion, but would like to recover the money it lost in Icesave.

“But Iceland does owe the United Kingdom £2.3 billion... we will use the application process to make sure that Iceland meets its obligations because we want that money back,” Cameron said in an article in the Wall Street Journal.

The comments are getting quite heated on this issue over at Eyjan, with one commenter calling for an end to the discussion over Icesave, saying Iceland should just pay the UK back. Other commenters disagree, saying that Iceland should not agree to pay off a “loan” it has no interest in taking out.

The term “debt” regarding the payment of Icesave is highly controversial for some Icelanders, with the term already appearing in quotation marks in newspaper Morgunblaðið, which is edited by Davíð Oddsson. Many Icelanders blame him for the financial crisis, as he was head of the Central Bank when the economy collapsed in October 2008.

Source: eyjan.is

Labels: icesave

This story broke in UK newspaper The Guardian less than one hour ago, after it emerged this morning that Iceland is clear to begin formal accession talks with the EU.

The UK government has announced that it might decide to block Iceland’s application to the EU until the Icesave dispute is resolved, and the £2.3 billion (€2.75 bn, $3.4 bn) in question is settled. The Netherlands also took the same position as the UK.

UK foreign secretary William Hague stated earlier this week that “Iceland will have to recognise its obligations.” The prime minister of Holland, Jan Peter Balkenende, echoed William Hague’s sentiments in his remarks today. “Before the country becomes a member [of the EU], it needs to fulfil its obligations to the people of Britain and The Netherlands.”

Morgunblaðið also speculates that whaling could be another issue which could come up in negotiations. A few days ago, Germany expressed its wish that Iceland give up whaling in alignment with EU regulations.

Sources: guardian.co.uk, mbl.is
Image: jepoirrier

Labels: EU, icesave

Strong words came from a former director of one of The Netherlands’ largest banks which foresaw the Icelandic financial crisis, as he claimed that Iceland will be unable to pay back the controversially-named “Icesave debt” to the Dutch government. This was announced on the RÚV evening news.

Bert Heemskert, former CEO of Dutch bank Rabobanka, stated his opinion on TV station RTL when asked whether The Netherlands would get back the money it lent to Iceland for Icesave. He said that the amount is far too large for a small economy like Iceland to pay, also stating that it would be very difficult for Icelanders to completely pay off all of their debts in a reasonable amount of time.

Labels: icesave, Kreppa

In the least shocking ruling of all time (all time!), the European Free Trade Association (EFTA) has decided that Iceland has a legal responsibility to pay the British and the Dutch governments the minimum deposit guarantee for Icesave accounts opened in those countries. This means that the Icelandic government, via the deposit fund, is liable for a maximum of €20,000 per depositor, or approximately €5bn. The bank behind Icesave, Landsbanki Íslands, was nationalised in 2008 during the global financial crisis.

Labels: Banking, icesave