Finance ministers from Iceland, Netherlands and UK meet to discuss Icesave dispute
LEIGH PHILLIPS
29.01.2010 @ 17:42 CET
EUOBSERVER / BRUSSELS - In a sign of a possible thaw in relations between Iceland and the UK and the Netherlands, finance ministers from the three countries met informally on Friday (29 January) in the Hague to discuss the Icesave dispute.
Icelandic finance chief Steingrimur Sigfusson was in the Dutch capital this afternoon to meet his Dutch counterpart, Wouter Bos, as well as UK financial services minister Paul Myners for discussions that are "just an exchange of information and views - these are not negotiations," according to the Icelandic prime minister's spokesman, Einar Haraldsson.
Icelandic hot-springs (Photo: Thordur Thorarinsson/norden.org)
"We are hoping to see what scope there is for changes, whether the other sides are open to starting fresh negotiations and open up the Icesave agreement," Mr Haraldsson told EUobserver.
Prime Minister Jóhanna Sigurđardóttir told Icelandic radio today that Reykjavik is exploring what possibilities there are to amend the present agreement.
Last June, Iceland made an agreement with London and the Hague to pay them back €3.8 billion they used to compensate British and Dutch savers who lost money in October 2008 when their accounts with the online savings account Icesave were frozen, following the collapse of the parent company Landsbanki.
The north Atlantic nation had offered a payment schedule to the British and Dutch governments, but limited to what the country was able to pay. This would amount to an upper limit of four percent of growth in GDP in the case of the UK and two percent in the case of the Netherlands. If the economy did not grow, the country would hold back its payments and after 2024 what remained of the debts would be written off.
London and the Hague however refused Iceland's offer, forcing the Icelandic government to narrowly pass a bill that would schedule repayment of the entirety of the sums - worth around 40 percent of Iceland's GDP - and without such conditions.
Estimates suggest that every household will have to contribute around €45,000. Icelandic citizens are furious at a deal they say is as onerous as the reparations Germany was forced to pay after the First World War. Protests against the payback provoked the president of the country to refuse to sign the legislation enacting the deal and called a referendum on the matter, now due to take place on 6 March.
The move has resulted in Fitch, a credit rating agency, describing the country's bond status as junk, with Standard and Poor threatening a similar move. Further tranches of IMF cash have also been suspended in the wake of the decision and Britain's financial services minister said that if the referendum decision was allowed to stand then Iceland would be frozen out of the international financial system and would not be able to join the European Union.
However, polls suggest that the existing Icesave bill will be sharply rejected by voters and newspaper editorials in British and Dutch papers have strongly condemned their governments' tactics as "bullying", while development NGOs from both countries have also called for international arbitration.
There is no suggestion that London and the Hague have softened their position, but there have been a series of informal contacts in the last few days.
"That they see a reason to meet and discuss is a good signal of some openness," said Mr Haraldsson.
Icelandic opposition party leaders will also be present at the meeting in order for the Netherlands and the UK to get a sense of where they stand on the issue.
"There is no point in restarting negotiations if they are committed to a referendum no matter what," said the spokesman. "You can't have two tracks - one fresh negotiations and the other a campaign lead-up to a referendum."
Following the meeting, the Dutch and UK ministers refused to discuss the contents of their talks, but put out a joint statement with their Icelandic counterpart, saying simply that the sides "will now consider the situation after this meeting."
At this stage no further discussions are scheduled. According to British sources, the governments are to analyse what came out of the meeting before returning to the issue.
