Iceland gives new Icesave proposal to UK

City A.M. Reporter
ICELAND yesterday presented Britain and the Netherlands with a new proposal for repaying more than £3.2bn lost in Icelandic bank accounts in a last-ditch attempt to resolve the lingering dispute.

Iceland is trying to lure the British and Dutch governments back to the negotiating table on the “Icesave” problem, hoping to avoid a planned 6 March referendum on the issue and unlock vital aid for the island’s stricken economy.

“They did not close the door nor walk out, but neither did they receive our ideas with jubilation,” Icelandic finance minister Steingrimur Sigfusson said.

The Icelandic government said in a statement the talks to present the new proposal were held at the North Atlantic island nation’s embassy in London and that the parties were “assessing the situation” following the meeting.

Earlier yesterday an Icelandic government source said the new proposal involved quicker repayment of the country’s debt from a sale of the assets of failed bank Landsbanki.

Britain and the Netherlands have already compensated savers in their countries who lost money in “Icesave” high-interest online accounts and insist that Iceland must pay the money back.

Iceland’s parliament passed an Icesave bill setting out repayment terms in December, but the president refused to sign it, triggering the referendum.

Reykjavik wants to solve the problem so it can avoid the vote, as opinion polls indicate Icelanders will reject that bill which is based on an earlier deal with the British and Dutch governments.

The two governments have so far baulked at reopening negotiations on the issue, which is holding up aid from international lenders vital for getting Iceland back on its feet.

Further talks are planned.