UK ‘disappointment’ as Iceland rejects repayment deal

From The BBC: http://www.bbc.co.uk/news/world-europe-13022524

10 April 2011

Icelanders have rejected the latest plan to repay the UK and Netherlands some 4bn euros lost when the country’s banking system collapsed in 2008.

Partial referendum results show 58% voting no, and 42% supporting the plan.

Johanna Sigurdardottir, Iceland’s Prime Minister, said the rejection meant “the worst option was chosen”.

UK Treasury minister Danny Alexander said the decision was “disappointing” and the matter would go to an international court.

Dutch Finance minister Jan Kees de Jager said he would be consulting Britain about taking further steps against Iceland, but added that the matter would likely end up in court.

“I am very disappointed that the Icesave agreement did not get through. This is not good for Iceland, nor for the Netherlands.

“The time for negotiations is over. Iceland remains obliged to repay. The issue is now for the courts to decide,” Mr de Jager said in a statement.

It is the second time a referendum has rejected a repayment deal.

Iceland’s Landsbanki bank ran savings accounts in the UK and Netherlands under the name Icesave and investors there lost 4bn euros (£3.5bn; $5.8bn).

Analysis:

Joe Lynam BBC News

The Icelandic people were damned if they did and damned if they didn’t. It looks as if they still couldn’t stomach the idea of paying off the debts of privately owned banks – even if the revised deal was considerably more generous.

The consequences of this referendum vote is that Iceland’s years in the financial wilderness could be extended much further.

Moody’s and other ratings agencies look set to downgrade the country even further, making it prohibitively more expensive to borrow on the open markets.

Iceland’s bid to join the EU will be paused or even vetoed by Britain and the Netherlands. And the tiny Atlantic economy is facing legal action in the EFTA court which might force it to pay up sooner than planned and at a punitive interest rate.

Democracy doesn’t pay if you’re an Icelander.

Complete Article at:  http://www.bbc.co.uk/news/world-europe-13022524

One Response to “UK ‘disappointment’ as Iceland rejects repayment deal”

  1. Andrea B. Says:

    This whole thing is a stinking mess.

    There is plenty of blame to go around on this.

    The amount is wrong for a start. The Icelandic banks guaranteed up to £20000 for individual investors in the UK. The UK government paid them all £40,000 as did the Dutch government for some strange reason. The UK and Dutch government now want the extra £20,000 that they unilaterally decided to pay to Icesave investors from the Icelandic people.

    The Icelandic government on behalf of the Icelandic people guarenteed investors in Icelandic banks, after getting advice from US banking consultants. That led to billions pouring into Icelandic banks.

    Then Icelanders went on a buying spree and ran up completely insane levels of debt, living a completely unsustainable lifestyle. That bit most Icelandic people conveniently forget to mention in all this.

    The UK and Netherlands governments will actually find the amount to be paid back will be reduced to the maximum guarentee level of £20,000 per investor by the European Free Trade Area court. They will order the Icelandic people to pay up to £20,000 per investor, but no more. That will piss of the Icelandic people, the UK and Netherlands. Basically in court it will be a draw.

    The bank branches were actually incorporated and oversaw by regulatory authorities in the UK and Netherlands.

    A bit that is not talked about is that Germany is owned a lot more than the UK and Netherlands combined, but has let it go.

    The big inconvenient fact that no one mentions is that in the last 6 months of those banks operating, they did the rounds in every charity in the Netherlands, getting thousands of charities to invest in there banks. A lot of anti-trafficking, disability and other charities lost there money when the banks went down.

    Also the President of Iceland who refused to sign the law paying the money back, has quite strong connectons to the people who carried out this scam, as does the owners and editors of every newspaper in Iceland. There is serious misinformation about this in Iceland.

    In Iceland, an enquiry by the regulator in an Icelandic bank was nothing more than a job interview at which if he did well, he got a job at least 20 times his regulator salary. The same thing happened in Ireland, UK, USA, Spain, Portugal, Italy and Greece and is still happening today.

    The bank owners moved from Iceland to the UK, where they now live and are regular visitors to major banks and active on the socialite scene in London. There is no warrant out for there arrest anywhere.

    Strangely the documentary ‘Inside Job’ has actually got an OK general summery of what happened, although it would really need to be about 6 times as long, so as to cover every facet of what was in effect a robbery of the people of Iceland.


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