Financial Regulatory Forum

ANALYSIS – Icesave row, Greece feed anti-EU fire in Iceland

By Wojciech Moskwa

REYKJAVIK, March 8 (Reuters) – In the eyes of Icelanders, it seems Brussels can do no right. When it comes to fish, European Union bureaucrats intervene too much. When it comes to debt crises like Icesave or Greece, EU leaders simply don’t do enough.

The result is that on an island which has plenty of good reasons to join the bloc, interest in membership is now waning.

And that increases the odds that Iceland’s long-term future could be that it slips back into being a rocky outpost on the northern fringe of Europe, with its embattled currency prey to the ebbs and flows of financial markets.

“People are growing suspicious of the EU,” said Gudbjorg Andrea Jonsdottir, director at pollster Capacent. “They see the way Greece is being treated and realise that the type of security they hoped to gain as an EU member may not be there for the taking.”

The island nation of 320,000 people sought EU shelter after the collapse of its banks in 2008, seeing membership as a road out of a crisis that has hobbled its small independent currency and plunged the economy into deep recession.

PREVIEW-Angry Icelanders set to reject Icesave deal

REYKJAVIK, March 5 (Reuters) – Icelanders are set to reject the terms for repaying Anglo-Dutch debts in a referendum on Saturday, forcing new negotiations with creditors and delaying financial aid the country needs to fix its shattered economy.

Despite the negative consequences of rejecting the deal, Icelanders are furious about what they see as overly harsh terms from Britain and the Netherlands and they are now certain they can get a much better deal.

“Some will vote ‘No’ to tell the world that Iceland won’t accept this treatment, but studies have shown more than half believe that Iceland is ethically bound to pay back the debts,” said Gudbjorg Andrea Jonsdottir, director at pollster Capacent.

Dutch central bank chief: Iceland lied about bank woes

AMSTERDAM, Feb 4 (Reuters) – Dutch central bank President Nout Wellink accused Iceland’s government on Thursday of lying about the health of the country’s banks before their collapse in October 2008.

Wellink, in televised testimony before a Dutch commission investigating the credit crisis, said he had spoken to the head of Iceland’s central bank in early September 2008.

At that time, Wellink said, he was told that the Icelandic central bank had warned its government about six months previously about potential dangers for the banks.

Iceland plans Feb 20 for Icesave vote -draft bill

REYKJAVIK, Jan 6 (Reuters) – Iceland’s government is proposing a national referendum be held on Feb. 20 on a bill to repay Britain and the Netherlands more than $5 billion their savers lost when Icelandic banks collapsed, according to a draft bill seen by Reuters on Wednesday.

Iceland’s parliament had approved a repayment bill late last year, but Icelandic President Olafur Grimsson said on Tuesday he would not sign the bill into law.

The rejection means Iceland must hold a referendum, according to the country’s constitution.

Iceland leader rejects UK, Dutch compensation bill

By Omar Valdimarsson

REYKJAVIK, Jan 5 (Reuters) – Iceland’s president refused to sign a bill to repay Britain and the Netherlands more than $5 billion for money lost by their savers when its banks collapsed, calling for a referendum and sparking a political crisis.

President Olafur Grimsson’s rejection of the unpopular Icesave bill on Tuesday put aid from international lenders and his country’s aspirations to join the European Union in serious jeopardy, analysts said.

A Finnish official said the decision was likely to delay a loan of 1.8 billion euros from Nordic countries, part of an aid package led by the International Monetary Fund (IMF) which is vital the country’s economic recovery.

Iceland says has new repayment deal with UK, Holland over deposit losses

Iceland's Prime Minister Johanna Sigurdardottir smiles before a vote on the controversial "Icesave bill" in Reykjavik August 28, 2009. (File Photo) REUTERS/Ingolfur Juliusson By Omar Valdimarsson
REYKJAVIK, Oct 18 (Reuters) – Iceland said on Sunday it had agreed to a new deal to repay Britain and the Netherlands billions of dollars of deposits lost when the island’s banks collapsed in 2008, paving the way for new aid from international lenders.