So, Iceland has a new Icesave negotiating committee that headed over to London today for talks.
The Ministry of Finance sent out a press release so dry it crackles.
Subject: The Icesave issue discussed in London
Press release No. 5/2010The negotiation committee representing the Icelandic government met today with representatives of the UK and Dutch governments in the Icelandic embassy in London. At this meeting the negotiation committee presented a proposal for a new solution to the Icesave dispute, based on the agreement reached between government and opposition parties in the Icelandic parliament Althingi.
Heading the negotiation committee is US attorney Lee C. Buchheit. Other members of the committee are the Permanent Undersecretaries of the Ministries of Finance and Foreign Affairs, Guðmundur Árnason og [heheh, someone didn't read it over] Einar Gunnarsson respectively, Icelandic attorneys Jóhannes Karl Sveinsson and Lárus Blöndal, the latter representing all the parliamentary opposition parties. They are advised by Donald J. Johnston, former Secretary-General of the OECD, as well as experts from the corporate advisory firm Hawkpoint and the international law office Ashurst.
Following the meeting the parties are assessing the situation.
There was slightly more flesh and blood on the RÚV news this evening, where an awfully bleary-eyed Steingrímur J. Sigfússon was interviewed. He looked pretty dejected and said British and Dutch negotiators had “not stormed out of the room and slammed the door,” but remarked that, “they weren’t exactly jubilant when they heard our proposals.”
I dunno, I can’t get this image out of my head of the negotiating committee belonging in some old black-and-white B movie, heading out in a vain effort to contain a monster [FRANKENSTEIN! THE BLOB!] that has developed a life of its own and run amok. And while I wish the Icesave monster would just DIE! already, I also have to confess to a certain morbid fascination to see where it will go next.
{ 13 comments… read them below or add one }
You can’t seriously expect British Senior Civil Servants to be ‘jubilant’! They have been raised on centuries of reserve, cards played close to the chest, give nothing away. Doors are never slammed and smiling is verbotum since Gordon Brown’s disastrous attempt to be human on YouTube. The hidden agenda, I suspect is, that neither Government wants the referendum to go ahead and the Blob to head out into the unknown. So it will be a face saving Blob Limitation Exercise and at the midnight hour your Magnificent Seven, with a knackered Steingrimur at the helm, will ride home on the longboat with a compromise that will be just about acceptable to both sides. Or is that just a Disney view of the world?
sylvia from viking wirral
The Blob had Steve McQueen in it. I don’t see him on your negotiating team. Are they talking again tomorrow? Fingers crossed for some concessions on the UK/NL side.
I find it odd that they are ‘negotiating’ right now. Isn’t there a vote on the current contract coming up? Isn’t that one still in play?
Also, regardless of the attitude of the Euros, they are at the table and that is a clear sign that the (anti) strategy is working.
With time, the negotiating position can only improve. What is the hurry? As the pound crashes, the exchange rate will improve… and the list of benefits goes on. At least that is how I see it.
On the other hand, they may be running out of money for foreign goods. Does anyone know how much cash they have on hand for trade? That may be it because I can see them sweat all the way from Florida!
I find it odd that they are ‘negotiating’ right now. Isn’t there a vote on the current contract coming up? Isn’t that one still in play?
Yep, and the fact that it will overturn the existing law is the reason that the Icelandic government is trying to get a new contract negotiated.
Negotiate contract, rush through parliament (not so hard as political unity was a pre-condition insisted on by the UK/NL), tell Grimmo to sign it, repeal exisiting law. Job done.
With time, the negotiating position can only improve. What is the hurry? As the pound crashes, the exchange rate will improve
Actually, it’s the other way around. Firstly, the exchange rate used is fixed, so it really doesn’t matter what the pound does.
Second, at the end of the negotiation, whatever its result, Iceland will owe the money from late 2008/early 2009. So there’s no time pressure on the UK/NL to, for example, agree a lower rate as the start date of the loan is fixed.
The same cannot be said for Iceland. Sure, holding out for another year and a half may allow them to secure a much better interest rate, but it will also delay any assistance loans from the Nordics and the IMF. That directly hurts Iceland’s economy, and probably to a greater degree than the (say) 1.5% that they might save on the interest rate.
Kris, Iceland is exporting more than is imported so there´s plenty of cash for imports (but the demand for the bigger, more expensive items has more or less dried up)
Bromley, the exhange rate is not fixed (but it is the Euro that is going down more than the pound) but the controls on currency out- and inflows are restricting the mobility somewhat.
I am not sure if delay will work against Iceland, there are increasing signs that the position of the Norwegians and others are changing and the the loans may be granted no matter what happens to the Icesave.
I am personally not convinced that we really need all those loans, I think we should re-negotiate some of the loans and make a greater effort to make earlier repayments on some of them .
The public sector here grew enormously (during the government of the right-wing parties) and there is plenty of room to cut down in expenditure without a reduction in service.
Bromley, the exhange rate is not fixed (but it is the Euro that is going down more than the pound) but the controls on currency out- and inflows are restricting the mobility somewhat.
Yep, you’re right. I wasn’t actually thinking of the currency controls, but rather getting in a muddle over the fixed exchange rate in the original Icelandic deposit guarantee law used to convert ISK to euros.
I am not sure if delay will work against Iceland, there are increasing signs that the position of the Norwegians and others are changing and the the loans may be granted no matter what happens to the Icesave.
Well, there’s been a good deal of movement on the Norway side of things, but I can’t see the Swedes moving a millimetre and haven’t heard of anything conciliatory from Denmark/Finland. If I was Sweden, I’d be worried that where Iceland goes the Baltics may follow. Still, I know little about that, so I may be wrong. I’m not even sure what to make of the total absence of the joint statement from the Nordics due a month ago.
Can anyone explain to me why the population of Iceland should be indebted for the bankruptcy of a private company?
“Can anyone explain to me why the population of Iceland should be indebted for the bankruptcy of a private company?”
Banks are not private companies in the normal sense, they are explicitly guaranteed by the central banks. Besides, the Icelandic state guaranteed the Icesave depositors by guaranteeing Icelandic depositors – they could not discriminate.
Peter, the Icelandic state did not discriminate.
It did not matter what your nationality was as long as you had your deposits in the Icelandic parts of the failed banks.
“the Icelandic state did not discriminate. It did not matter what your nationality was as long as you had your deposits in the Icelandic parts of the failed banks.”
http://www.island.is/media/eydublod/Forgangsr-LegalOpinion_-_SuperPriority_-_PM.pdf
>as long as you had your deposits in the Icelandic parts of the failed banks.
AKA discrimination. That’s like the UK government saying that it’ll guarantee the HSBC branches in London, but not those in Bristol.
No Bromley, it is like the UK government being willing to guarantee branches in London but not in Hong Kong.
>No Bromley, it is like the UK government being willing to guarantee branches in London but not in Hong Kong.
Is Hong Kong a part of the EEA? Does the UK have regulatory responsibility for HSBC in Hong Kong?