An EU commissioner’s assertion that there is no legal provision for state guarantees of bank deposits in the European Economic Area (EEA) could prove important for the Icelandic government in dealing with Icesave.
Icelandic Supreme Court Judge, Larus Blondal told RUV that the commissioner’s claim should at least be prominently included in the government’s reply to a letter from the European Free Trade Association (EFTA) monitoring body, the ESA. The ESA wrote to the Icelandic government this spring reasserting that the country needs to cover the first EUR 20,000 of each Icesave account. The government has until September to reply formally to the letter.
But there can be no state guarantee of bank deposits in the EEA – so says Michel Barnier, European Commissioner for Internal Markets and Services, to Norwegian media. Norway and Iceland are both EEA members but not EU members.
Larus Blondal believes, if correct, the commissioner’s remarks could provide an interesting new dimension to the Icesave case. He points out that both he and Professor Mar Sigurdsson have both been echoing Bernier’s sentiments all along; but most people disagreed.
The parliamentary investigation committee into the banking crash also looked into how European banking laws fit with Icelandic law and found that the Icelandic government broke no specific rules over Icesave.
Meanwhile, the official position of the Icelandic, Dutch and British governments is that they all still strive to reach a fair reimbursement deal. Iceland has consistently said it wishes to pay for Icesave, despite the fact that it was run by Landsbanki, a private company.
Thank god the UK exists, you can do business in the UK, there are ethics and laws. No Icelandic rubbish.
Please do not do any business in Iceland, they are outright thieves.
Please do not allow them into the EU.
Iceland – what a joke! worse than Mugabe’s cronies in Zimbabwe.
These people are living off my blood and sweat and my dad’s work in a factory for 20 years. The Icelandic banks and the BCP Millenium in Portugal guaranteed the investments in BONDS, now no no-one takes the blame.
The Icelandic people are lving from my hard work.
>So let us get this straught. UK did give Icelandic state an offer it couldn’t refuse ?
No, I was objecting the the muddy-the-water point you made about the UK stepping in and compensating savers before the TIF had a chance to secure financing. This point has been used to justify the position that Iceland is not responsible, even if it was determined that it would have otherwise been.
I can’t see how this is correct:
“In EFTA court this aspect is going to matter very much in deed.”
On the priority issue (aka Ragnar Hall issue), common sense leads me to think that the TIF should have absolute priority. However, what I consider to be common sense may well not reflect legal reality. The UK believes that it doesn’t, with some justification according to Rebeleconomist:
http://reservedplace.blogspot.com/2010/03/on-thin-ice.html
But, even if the UK government is trying it on, that’s how negotiations work. Just as the Icelandic side manage to keep a straight face when they demand a lower interest rate than that offered by the Faroes and the Nordics to Iceland.
Despite all your “to court”, the case is presumably not as strongly in favour of Iceland as you hope or believe. Otherwise it’d have gone to court already – an immediate reply to that ESA letter saying “bugger off” would have triggered a court case. For example, at the extreme, if it loses the case and fails to secure funding on the open markets (at a ruinous rate and placing the credit rating firmly in junk for the forseeable future), Iceland is looking at sovereign default in 2010.
Unless you think that Iceland should be able to go to court and then, assuming it loses, somehow force the UK to lend it the money at whatever rate suits Iceland?
Brumely did write :
>This nonsense again. What does it matter? No one was going to lend anything to the TIF.
So let us get this straught. UK did give Icelandic state an offer it couldn’t refuse ?
An offer you can’t refuse? http://www.youtube.com/watch?v=pEJiTcGxVNU 0:24
In EFTA court this aspect is going to matter very much in deed.
( As I say this was about Darling saving UK from its country run . UK did pay off its savers completely — well that is OK but what is not OK then is to force the terms unilaterally on Icelandic state as was tried 2009 til 6 March 2010 — to force terms to pay back at 5.5% interests and Ragnal Hall+ issue which would cause national sovereign default by 2016.
We can perhaps make excuse for Darling that he was trying to clean up horrible mess made by Brown since 1997 in UK banks and Darling in panic to stop the UK country run. Well then even though it was done without Icelandic states concent it is fair to ask to get money paid back to UK tax payer but NOT at this high interest rates and not without letting judge rule on it. )
http://www.icenews.is/index.php/2010/03/07/1-5-voted-yes-in-icesave-referendum/#comment-123596
As I have maintained right from start and during referendum :
” This Icesave dispute should be going to court for judgement, not to the court of the public opinion ”
( And our useless Red-Green government did just let the December law go to the referendum like negligent ” EU at any cost ” idiots they are . )
+http://www.slideshare.net/hjalli/the-icesave-dispute-priorities-and-division-of-claims
“Isn’t the “we are of course willing to honor our obligations, and will certainly pay, but only if…” position becoming a little tiresome?”
There is of course the fact that the Icelandic government has given written and verbal confirmation that they would underwrite the guarantee.
Notwithstanding Bromleys observation that this report is incorrect, the commissioner is a politician and not a lawyer, his opinion is just that. An opinion.
European banks are pyramid schemes.
The man in the street saves his hard earned money through sewat and blood, while the bank executives steal it all through huge salaries and bonusses.
What do you do if a Bank steals your money? Rob the bank.
A work colleague once told me, money in a bank is not a good investment and should be temporary solution, a little too late,
may life savings are gone.
5.5% rapacious? There is such a thing as the time value of money.
Isn’t the “we are of course willing to honor our obligations, and will certainly pay, but only if…” position becoming a little tiresome? There’s nothing wrong with trying to secure the best deal possible…especially in light of the utterly bankrupt state of the country. Perhaps just say so.
that UK in particular did uniliaternally decide to payout all of the UK IceSave depositor unlmited, without giving private Icelandic fund time according to the letter and spirit of EU regulations.
This nonsense again. What does it matter? No one was going to lend anything to the TIF.
Doesn’t appear that this report is accurate, although that opinion is based on machine translations.
From the googlated source:
ESA’s position that a state is responsible to cover lost deposits if the bank guarantee fund can not . . . ABC News wanted to know by the European Commissioner for Internal Market, French Michel Barnie.
He did not own. But an e-mail from the Commission is crystal clear:
- EU supports the principle that “the polluter must pay” and the objective of sharing the costs of a future financial crisis should not fall disproportionately on the taxpayer.
(Emphasis added).
Using another translator, it looks like “Han svarte ikke selv” means, unsurprisingly in the context, “he did not answer”. So attributing the quote to him is incorrect.
Note the “future” in the Commission email. Later in the Norwegian source, it appears to go on to say that the Commission believes that Iceland has to pony up.
—————-
Icelandic report:
http://www.ruv.is/frett/ny-stada-i-icesave-deilunni
Norwegian source:
http://www.abcnyheter.no/nyheter/okonomi/100728/icesave-kan-utlose-dramatisk-bank-strid-eu
English translation:
http://translate.google.co.uk/translate?hl=en&sl=no&tl=en&u=http%3A%2F%2Fwww.abcnyheter.no%2Fnyheter%2Fokonomi%2F100728%2Ficesave-kan-utlose-dramatisk-bank-strid-eu
*The 27 EU member states both individually and collectively and more important the IMF would not assist until it was signed .
I did say above :
>”The UK did not ask permission of the fund or our government. They just used blocking at the IMF to force the Haarde government to sign the agreement in principle despite obvious need for impartial court to review situation.
”
Just to clarify UK did make unilaternal payout to all UK Icesavers of Landsbanki London branch in October 2008 without asking and then in November 2008 was co-erced the signing of the agrement so called ” Brussels Guidelines “:
http://eng.forsaetisraduneyti.is/news-and-articles/nr/3229
( The EU and more important the IMF would not assist until it was signed .)
Shocking! Our governemtn has failed to find tis outearleir? What are they, amateurs? or shall I believe that they knew but in there blind run towards EU memebrship they will do anything to get in? That’s more likely. These politicians are a disgrace for there peple and there country.
by the way, the same is for the media in Iceland. that’s not journalism, it is only commenting and propaganda…on both ways. Shame on you, too.
We need Norwegian reporters to ask the right quesiotns, as Icelandic journalists are not able to.
Before Peter London/Krakow does post again here some nonsense on this as he likes to do, is the facts of that ” kangeroo court ” arbitration of 17 November 2008 :
+http://www.icenews.is/index.php/2009/07/29/more-members-of-parliament-against-the-icesave-deal/#comment-87719
This is not surprise, as it one of reasons that UK ( and lesser degree Dutch ) want to and have wanted avoid this in impartial court machinery since 2008, with main reason being :
i ) state guarantee is entirely and specifically intended to be be avoided in the EU regulations by burecrats at EU commission that did write this EU banking regulations in 1994 and new one since.
( As this would go against one of the pillars of EU and EEA agreement which involved no state aid to avoid distorting competition. )
Icelandic govenrment itself has to pass a law specifically to allow a state guarantee according to our laws on the books since 1990s.
— reason this was not passeed in Iceland before August 2009 was that there was no state guarantee expected or specified by the EU regulations. In fact the opposite –
After Ireland did do its state guarantee in late 2008 to stop capital flight from its banks then most EU states then did make uniliateral state guarantees — even German government after much initial and rightfull resisting it had to agree and do it. Otherwise all the money off to Asian banks, etc.
ii ) that UK in particular did uniliaternally decide to payout all of the UK IceSave depositor unlmited, without giving private Icelandic fund time according to the letter and spirit of EU regulations.
The UK did not ask permission of the fund or our government. They just used blocking at the IMF to force the Haarde government to sign the agreement in principle despite obvious need for impartial court to review situation.
It is not that Icelanders would be so upset about UK bailing out UK Icesave and us tax payer having to pay our obligations later in form of a paying for costs of loan to the fund etc — except that then after that UK and Holland did try on this ” we paid out ” so now you must pay us back with the rapacious 5.5 % interests and Ragnar Hall issue.
iii) because it will expose facts that during that fatefull week in October 2008 that UK iteself was experiencing a ” country run ” and so Darling and Brown’s actions were not for Iceland’s benefit, as they were for UK’s and that is why this interests and Ragnar Hall issue are so unfair. ( This is confirmed by reading documenting of actions in SIC ” black report” about this+++. )
Icelanders will pay back, but not with this interest and without Ragnar Hall issue un addressed.
That there is one in EU commission who will stand up for what is fair and right is unexpected as that is just not the way it works over there in EU commisson and rubber stamping EU parliament ( with few honoruable exceptions++).
For how it usually works see for example that ” kangeroo court ” arbitration of EU in November 2008+
+http://www.icenews.is/index.php/2010/03/22/norway-pushing-to-break-imf-iceland-deadlock-over-icesave/#comment-135106
++http://www.icenews.is/index.php/2010/01/09/eva-joly-to-dutch-media-netherlands-being-arrogant/#comment-109671
+++sic.althingi.is/pdf/RNAvefKafli18Enska.pdf Chapter 18 Deposits in Financial Institutions in Branches Abroad.