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Icesave talks break down and UK/Holland leak a document

So, Icesave talks between Iceland and the UK/Holland broke down this evening. The Brits accuse the Icelanders of walking out, as per this report from Channel 4 in the UK, which quotes a Treasury spokesman:

The UK and Dutch Governments are disappointed that despite their best efforts over the past year and a half that the Icelandic Government is still unable to accept our best offer on the Icesave loan.We have consistently supported Iceland’s economic recovery and our latest proposal built upon this, offering the Icelandic Government the same interest rate as their current loan from the Nordic countries and, in addition, an offer to waive interest for the first two years amounting to 450 million Euros.

Meanwhile, the Ministry of Finance sent out a generic press release, to wit:

The Government of Iceland today announced that the latest round of talks with the Netherlands and the United Kingdom regarding the Icesave matter have adjourned without a final resolution. Representatives of the three Governments have been meeting in London for the last two weeks.

Icelandic voters will go to the polls on March 6, 2010 to vote on whether to approve the terms of an Icesave deal negotiated with the British and Dutch Governments last summer. The law approving that earlier deal was put to a referendum by Iceland´s President, Ólafur Ragnar Grímsson, on January 5, 2010.

“We had hoped to be able to reach a consensual resolution of this issue on improved terms”, said Steingrímur J. Sigfússon, Iceland´s [God how it annoys me that Icelanders can never get those apostrophes right] Minister of Finance, “but this has not as yet been possible. Constructive proposals were made by both sides during these talks, but significant differences remain. We will now consult with our negociating [sic] team once they are back in Iceland.”

As if the Icesave debacle wasn’t a farce already, it is now so far out that even freaking NASA couldn’t get there. Consider: in nine days’ time we – the Icelandic nation – will face a referendum to decide whether to pass a bill that is worse than a solution that has since been proposed. A bill that is already old news because during the round of talks a couple of weeks ago, the UK/Holland proposed a solution that was marginally better than the one we are voting on.

Is this insane, or what? OF COURSE that bill is going to be voted down. Why would ANYONE in their right mind vote in favour of a bill when they already know that a better deal can be had?

And yet, there is no other bill on the table, so there is nothing else to vote on. But the referendum cannot be pulled because the president promised it to the people, all in the name of this direct democracy that we Icelanders supposedly have in spades.


That referendum is a big fat waste of time and money. It’s going to get voted down — and then what? The Channel 4 report has a link to a leaked document – a legal opinion written by experts from the European Central Bank, and the European Commission, and seen by Channel 4 news [that] backs the UK and Netherlands position against Iceland.” [They’re pulling out the ammunition now, clearly.]

So will the UK/Holland continue to wield their influence within the IMF and the EU to get Iceland blacklisted? Will there be sanctions against us? Is it back to the turf farms, then?

Interesting times ahead, people. Interesting times ahead.



Comments on this entry are closed.

  • Andrew (the other one) February 27, 2010, 2:37 pm

    “they ate” should read “they are”- dodgy typing on an iPod!

  • James Wilde February 27, 2010, 3:15 pm

    The problem is now that the IceSave issue has become so infected from all sides that the only way it will ever be resolved is in the courts – unless, of course, the Icelandic government of the day, whenever that day is, simply capitulates.

    Such a course – resolution in the courts – would free the parliament from debating the issue and allow them to turn their attention to what they were elected for. It would give the Icelanders time to inform themselves of the rules, laws and interpretations that are relevant and decide what they want their government to do about it and tell them so. It would allow the Icelandic parliamentary committee several years more to publish their damn report* and for the Icelanders to react to it. It would give Eva Joly time to charge the criminals behind the collapse.

    And the Brits and Dutch have already paid out the money so it’s only their governments which will have to wait. The depositors who lost their money have no problems.

    * With regard to the parliamentary committee’s report, I just want to say “I told you so”. Somewhere in Alda’s blog comments (not this thread) I said that they’re going to succeed with the unlikely trick of postponing the report until after the local elections in April! 🙂

  • Bromley86 February 27, 2010, 8:43 pm

    The British and Dutch want Iceland to pay everything

    That’s not the case. Even with the Ragnar Hall issue (each claim is split rather than treated as one) the UK & NL aren’t trying to get Iceland to cover 100% of the deposit. Only the 20,887 per a/c

    Assuming 88% recovery, the effect of the Ragnar Hall issue is that the Iceland state has to cover something like 12% of the 4bn euro guarantee (not that simple, but something like that). Without the Ragnar Hall issue, they’d be fully repaid from Landsbanki assets.

  • Andrew (the other one) February 27, 2010, 10:39 pm


    Ah ha! I must have missed the point somewhere in all the “noise”. Thanks for clarifying that.

  • Bromley86 February 28, 2010, 12:39 am

    Tell me about it Andrew 🙂 . I should say that this . . .

    “Without the Ragnar Hall issue, they’d be fully repaid from Landsbanki assets.”

    . . . might be a bit misleading in that, with or without the RH issue, the interest cost is not reclaimable by Iceland from the carcass of Landsbanki.

  • Bill the sociologist February 28, 2010, 1:57 pm

    Alda writes: “Just have a slight problem with sweeping generalizations and generic references, you may have noticed. Although no doubt I am guilty of them, myself.”

    No doubt at all …
    (Of Confirming and Conforming)

    “here in Iceland … there is enormous pressure to conform [just as there is with so many other aspects of this society].”