EU commissioner gives Icesave new face

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.

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