Iceland backs a new Icesave deal

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Iceland backs a new Icesave deal

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Iceland’s parliament has backed a new plan to repay four billion euros to the governments of the UK and the Netherlands.

The money will reimburse them both for bailing out 400,000 of their own citizens who lost savings in the Icesave bank collapse.

The deal replaces an earlier one which Icelanders rejected in a referendum.

Icelandic Finance Minister Steingrimur J. Sigfusson said: “Parliament has really answered both questions: yes, we want to solve this on a basis of this agreement, and that parliament is going to deal with it on its own, and there is not going to be a referendum.”

Under the new terms Iceland will have longer to repay the money, until 2046 and at a lower 3.3% rate of interest.

But Sigmundir David Gunnlaugsson of the Progressive Party was not happy.

“Well naturally I’m disappointed because this means that Iceland is being forced to accept terms that other countries, for example the UK and the Netherlands, would never have accepted if they were in the same position.”

Icesave’s parent, Landsbanki went under in 2008 along with other main banks. The government compensated its savers, but not those overseas.

The UK and the Netherlands stepped in but extracted an unpopular deal from Iceland’s government. People power rejected it then but not this time.