Iceland told to compensate UK Icesave investors

ICELAND should ensure that Dutch and British investors in failed bank Icesave receive at least minimum compensation for lost deposits, a European trade body overseeing Iceland’s cooperation with the EU (EFTA) said yesterday.

The British and Dutch governments paid out billions of euros to depositors whose funds were frozen in failed online Icelandic bank Icesave

The two countries have held so far unsuccessful talks with Iceland on being repaid for footing the compensation bill.

The EFTA Surveillance Authority said in a letter of formal notice, the first stage in legal proceedings that can end up in court, that Iceland had breached relevant directives in treating Dutch and British depositors differently from those in Iceland.

Under the terms of Iceland’s participation in the European Economic Area Agreement, the country is required to provide compensation of at least €20,000 per deposit, it added.

“Iceland ... (is) under obligation to provide the minimum compensation,” the authority added in a letter to the government of Iceland.