Details of some of the main articles in the newest draft deal in the Icesave dispute between Iceland, the Netherlands and the UK are now coming to light. The burden on the Icelandic state will be anywhere from ISK 0-50 billion (USD 0 – 435.2 million).
Details of the main points of the proposed deal, such as the rate of interest on the loan, were presented to the board of the Iceland Chamber of Commerce and have also been presented to the leaders of the Confederation of Icelandic Employers. The three countries’ negotiation committees are still at work.
Under the new deal, Iceland will pay interest of 2.78 percent instead of the originally-offered 5.55 percent, which was rejected in the March referendum.
The negotiators work by finalising everything they agree upon first, before moving on to technical details and areas of disagreement. There are reportedly very few issues still unresolved.
The reason for the very vague prediction of how much the Icelandic taxpayer will have to pay is mostly because of the varying strength of the Icelandic krona and uncertainty over how much will be recovered from the assets of Old Landsbanki.
Minister of Finance Steingrimur J. Sigfusson would not comment further than saying the negotiations are going well and that the deal will hopefully be finalised soon. Once that happens, it must be approved by the Icelandic parliament.
The deadline for responding to a letter from the EFTA confirming that Iceland will take responsibility for the Icesave debt runs out tomorrow. A letter of response is reportedly ready to be sent, pending further details from the negotiations. The EFTA letter this summer suggested that Iceland could be ejected from the trading bloc if it fails to clear up the Icesave dispute.
He answered that if Iceland would lose that case then all the money loaned ( unilaterlally by British and Dutch to the IceSave account holders without asking Icelandic deposit foundation or governemnt ) would become immediately payable by Icelandic state to UK and Holland governemnts.
The “unilaterally” thing is fluff. He’s merely saying that the court decision would create a state liability that would be immediately payable. Nothing else. Of course Iceland could not meet that obligation without a loan from the UK/NL, hence his point about being back at the negotiating table again.
Now from me some thoughts on IceSave II and issue of another referendum ..
Given back ground of IceSave matter sparring between Bjarni Ben and Steingrímur J. over Ice Save III on Thursday ( 16 th ) night’s Kastljós was quite funny at some level of humor given that if it had been two year ago it would have been Steingrímur sitting in Bjarni Ben’s chair being very critical ( and as we know Steingrímur likes to shake his fist unlike more moderated Bjarni Ben ).
I hope how ever that Independence Party will — after giving Steingrímur J. and Jóhanna Sigurðardóttir the pasting that they deserve like he did then on Kastljós for Red- Green colaition trying their damned ness to kick the whole country and future generations over the water fall with IceSave I and IceSave II agreements — support IceSave III.
it is because this terms do seem reasonable.
It is likely that Bjarni Ben’s meeting in Birmingham in October 2010 with David Cameron, Bjarni made made it clear that if terms were reasonable Independence Party parliamentarians would ultimately support IceSave III.
( Also no doubt they did agree on just what a horrible prime minster and chancellor of excequeuor Gordon Brown was . )
Mr Bucheit was straight talking but diplomatic and made it clear that he hoped this would not need Ólafur Ragnar to put it to referendum but — it is my opinion that regardless though there is NO WAY that this can be done without a referedum — IceSave III MUST go to referendum.
It is not normally problem that parliament is delegated powers by people in elections only every 5 years, but it is a problem that this parliement of the Red-Green coalition has so much ABUSED this POWER since 2009 most clearly in the IceSave case.
The people will not trust just a simple parliamentary majority unless it has cross party support in parliament. If the Idependnce Party backs it then that is better but still.
Do you hear the voters Steingrímur and Jóhanna ?
YOU DO NOT HAVE OUR TRUST.
YOU HAVE ABUSED YOUR POWERS TWICE TOO MANY.
If you try and ram this through we will have our referendum and we will naturally vote it down.
If you treat this carefully with cross party support then maybe this will get people not against it when it goes to referendum.
Mr Bucheit — as much as I respect what you have done in this negotations — you are wrong — referedums are exactly what is needed more and more particularly with this out of touch centralized power lovers that currently sit in Icelandic government seats.
This does act as a check on the ABUSE of their delegated power by the parliament as we have seen here in IceSave case.
— He was then asked: How bad would it be to take it to court ?
He answered that if Iceland would lose that case then all the money loaned ( unilaterlally by British and Dutch to the IceSave account holders without asking Icelandic deposit foundation or governemnt ) would become immediately payable by Icelandic state to UK and Holland governemnts.
He said his view was take it to court and if it did go against Iceland then we would be back at the negotiating table at that point. And that would of course have eroded the Icelandic states negotiating position. And it would then be unknown if as good as these interest rates could be got.
– Then asked if there was shared responsbility agreed in the negotiations over IceSave III
As depositors were paid out in full and quickly, it is left to both UK / Dutch and Iceland governemnts to apportion the burden of the financial loss.
He said the terms that have been agreed indicate that this is not a normal govenrent to government type loan. Compared it to the terms given by the EU to Greece, Ireland, etc. i.e. it recognizes that the situation of the loaning of the money was under distressed and legally unclear circumstances.
As depositors were paid out in full and quickly, it is left to both UK / Dutch and Iceland governemnts to apportion the burden of the financial loss.
It is based on Commercial Interest Reference Rate and he does make it clear that this is about making sure that there is no subsidy by either Icelandic tax payer in giving profit money to British / Dutch tax payer, or the other way with UK tax payer subsidising Icelandic ones ( which is what Mr Bucheit did make clear – that below this interest rates would be subsidy of British and Dutch to Icelandic tax payer ).
Brumley wrote:
>Quite likely if Icesave goes to court, the UK/NL win and don’t feel like offering 3%
Here is Lee Bucheit who did negotiate IceSave III agreemen from Dec 9th on Kastljós, it is worth watching :
http://dagskra.ruv.is/sjonvarpid/4544991/2010/12/09/1/
As Lee Bucheit did say it was his job to go and negotiate. ( He said not re-negotiate – why becauese it was clear that Svavar Gestsson and Steingrímur J did do in 2009 cannot be called negotiation .)
This is direct quote from Mr Bucheit :
” The doubts [ about the obligation of the Icelandic state of a deposit guarantee ] were relevent. To the extent that there was an open question as to wether there was a legal obligation on the part of the Icelandic state to stand behind the deposit insurance arrangement in Iceland [ that comes from EU directove 94/19/EEC ]. Views on that matter are split very sharply.
The point was however that to try and litigate that would have pushed resolution off a long time with an uncertain outcome.
Our feeling as a negotiation team was that if one could come to a satisfactory resolution in negotiated way that was the best outcome for Iceland and its taxpayers.
To the extend that there were concerns about it of course they had tactical utility to us in persuading the British and the Dutch to moderate their demands. “
>It is a possibility but it is not likely. But who knows what unlikely events may happen in future.
Quite likely if Icesave goes to court, the UK/NL win and don’t feel like offering 3%. Quite likely if the depositor priority is overturned and Iceland has passed an Icesave agreement.
>I think I already explained these matters in detail. If you wish to persist with the dogma, that the sovereign State should repay the failed Bondholder loans
Don’t think I’ve said that, so you must be misremembering, as well as misunderstanding. They should lose 90% (or whatever) of their claims. Their claims are against a company, not the state.
However, Iceland has changed the priority of creditors of a bank that is now in administration such that they will lose 100%. That is theft. As I said, I’m not saying it was a bad call for the (IP) government.
Bromley86 says:
December 16, 2010 at 10:54 am
Actually it’s a possibility. (Iceland defaulting on its sovereign debt) I can think of a number of possible futures that would place the Icelandic state in an untenable position.”
It is a possibility but it is not likely. But who knows what unlikely events may happen in future.
“The government of Iceland had stolen from bondholders of Landsbanki. No two ways about it. It was even called the “sh*ts with foreigners law” (a direct translation, “dump on the foreigner law” is apparently a better translation) by civil servants at the time. Now they may have have good reason to, but that’s a different matter and of little consolation to people like Anon (who, remember, is a bondholder).”
I think I already explained these matters in detail. If you wish to persist with the dogma, that the sovereign State should repay the failed Bondholder loans, then so be it. The EU does support that dogma. And it would appear that you claim that any country who deviates from this dogma will be regarded as thieves. The Iceland State cannot steal what has already been lost by someone else, or steal the escaping air of the lost value from a property balloon. Any country, as Ireland have done, that attaches the bank debts to the people, is engaging in an act of fiscal delinquence.
“None of the above means I’m xenophobic. Neither is it nonsense. You could argue with parts of it, and you might be right and I wrong, but it’s a valid position nonetheless.”
A valid position? Valid under what criteria? Suicide may appear valid to a person in despair.
To most rational economists, what you purport – to bail out the bondholders by placing the burden of private debt onto the citizens, is econocide – a deliberate act of killing the economy.
The EU/ECB under Trichet has overseen a vast European wide inter-country, inter-bank debt pyramid scheme where out of control German and French lenders lent to out of control EU & Iceland borrowers. Yes it was criminal practice because inevitably those at the bottom of the pyramid will get burnt.
No one forced EU banks to lend willy nilly to Iceland. No one forced them to lend to Ireland. The risks of such careless investing were obvious and collapse was inevitable. Iceland people take their large share of the hit and so also do the bondholders.
I have not found one single rational minded economist who thinks subjecting the citizens to penury in order to compensate private lenders, makes any sense But there are plenty of economists all over the world who applaud many of the actions of the Iceland government to deal with events since the Bank crash.
“Unqualified general statement like “invest in Iceland and they will steal it” is xenophobe nonsense and not a statement of fact.”
Ok, I’ll rephrase it.
“invest in Iceland and they will very likely steal it”
or
“invest in Iceland and you will never know if or when you will get your money back” (now thats a fact, with the capital controls).
>I have not heard of Iceland defaulting on its sovereign debt, nor is it likely to happen.
Actually it’s a possibility. I can think of a number of possible futures that would place the Icelandic state in an untenable position.
>Unqualified general statement like “invest in Iceland and they will steal it” is xenophobe nonsense and not a statement of fact.
The government of Iceland had stolen from bondholders of Landsbanki. No two ways about it. It was even called the “sh*ts with foreigners law” (a direct translation, “dump on the foreigner law” is apparently a better translation) by civil servants at the time. Now they may have have good reason to, but that’s a different matter and of little consolation to people like Anon (who, remember, is a bondholder).
The government of Iceland has locked in foreign investment that many of those investors would like to have taken out. They had good reason, but it’s not total hyperbole to call that stealing. Although, to be fair, those investors will probably get more back by not being allowed to panic and the Icelandic government missed a trick by not implementing Physchim’s suggested currency auctions to capitalise on their post-crash fear.
The business environment that has been allowed to arise in Iceland has stolen money from investors, both foreign and domestic. Irrespective of which FSA was actually responsible for Icesave (and I’d maintain that it was the FME), the FME sat back and allowed the banks to be robbed from within. The government of Iceland gave those banks to their buddies (for no money down, which was to become a regular feature). The nepotistic culture of Icelandic society protected those businessmen, as did the corrupt nature of Icelandic politics. In two years I’ve seen little to make me think that in ten years the situation will be different.
None of the above means I’m xenophobic. Neither is it nonsense. You could argue with parts of it, and you might be right and I wrong, but it’s a valid position nonetheless.
Peter – London/Krakow. “Therefore what I said wasn’t xenophobic or nonsense, just a statement of fact.”
Unqualified general statement like “invest in Iceland and they will steal it” is xenophobe nonsense and not a statement of fact.
I have not heard of Iceland defaulting on its sovereign debt, nor is it likely to happen.
Take the time to express exactly who and what you are referring to, in what context and make an effort to rise above the tabloid headline psychology.
Why do you still consider guaranteeing the business and profits of private bankers?
You seem to be the only nation small enough to keep government responsible to the people and not corporations/bankers. News had it that you were getting close to putting on trial those responsible and even tracking and taking back the ill gotten gains of some of those people who now hide out in London.
In my country, the USA, the corporations were granted rights as people (14th Amendment to the Constitution) and even more so were recently given money ($4 trillion) to cover bad investments and their profits in them. The nation is so big, the people so ill educated and fat they think the only way out is to elect someone claiming change. The belief in political promise obviously another error repeated time and again in the hopes criminals are not those you elected.
Iceland on the other hand seems small enough where government is within reach. Anytime government sits more than a days ride it is too big and too far to represent the people it claims. You gave me a good feeling when you told the UK and NL to bugger off. Now they keep trying and you are being fed another bill of goods to get you to shoulder a responsibility that was clearly that of private bankers.
If these private bankers somehow hoodwinked someone in government to claim they would pay you should get on them too. I have never, in 60 years, met anyone in government anywhere that was not corrupt. Never and that is in 102 countries I have been in. Politics is lying and the degree of reverence for a politician is directly related to how well they lie and their ties to media who fortify those lies.
I have only passed through your airport once many years ago so it may be different there. But I will say we, many Americans, hope that Iceland can bring a vision of reality to what is possible as an example of what can be done to these International banking terrorists.
Knowless says:
“Yes Peter you never run out of more xenophobe nonsense.
Anon put his money in a private bank with no State guarantee.”
Investing in Iceland is NOT safe, its very high risk. Icelandic banks owners stole their investors money. Therefore what I said wasn’t xenophobic or nonsense, just a statement of fact.
Latest information confirms that Icelandic banks were bankrupt in 2006.
Good evening Bromley86 and Bjarni,
I have sympathy for the Icelandic people for what has happened in Iceland, but I find it very hard to accept a bank just going under in this day and age.
Banks are supposed to have risk warning systems.
Banks have very highly paid people that are supposed to look after the investors’ money. In this particular case it seems that these Banks were operating not very differently from a pyramid scheme.
After my experience in Iceland, I now believe that most European and American Banks operate very similar to pyramid schemes.
All do very well until the last person deposits money, which means all your money goes to salaries not into a vault.
It is also very hard to accept how the Icelandic authorities and the European authorities lack the willpower and interest to catch the criminals and bring them to book. They money did not disappear, it is somewhere stashed away in other banks. Money does not dissapear, and the amounts in question will certainly leave a trace.
In my opinion, Iceland has such a small population, the criminals probably know everyone in government and know exactly how to delay the investigation process and stop anything from happening.
I have one trump card and that is my trust in the British police.
They are very professional and will leave no stone unturned until these criminals are caught. The UK invested a significant amount, then Germany, Hooland and Spain.
I also get the impression that people are scared to discuss this incident and take action by looking at the very few discussion bloggs.
In my opnion, the method used to defraud Iceland, Landsbanki and Kaupthing can be used anywhere in any country.
People, loosing 10 or 20 years of your working life is very serious,
especially if you put it in a Bank and you were defrauded. And more especially if it was not your mistake.
My wife divorced me soon after the Banking crash and my father’s health was affected.
That was my other reward, maybe God will help me, he does work in mysterious ways.
Kind regards,
anonymous
“The new deal sets a lower interest rate, of between 3 and 3.3 percent, on repayments from 2009-2016.
After that the rate will be based on certain official commercial interest reference rates, the Dutch ministry said.
Iceland will start to repay the full amount owed to the Netherlands and Britain from July 2016 and after pay-outs received from liquidated assets of collapsed bank Landsbanki, the parent company of Icesave.”
http://www.reuters.com/article/idUSLDE6B81LR20101209
Yes Peter you never run out of more xenophobe nonsense.
Anon put his money in a private bank with no State guarantee.
“What the IMF is called in Iceland”
Also befitting Iceland.
anonymous, as you now know Iceland is a very very high risk country to place your money. Put your money in Iceland they will steal it – and blame you for being stupid enough to trust them
What the IMF is called in Iceland
http://www.youtube.com/watch?v=l2Om5q4MJ9o&feature=player_embedded
>From the latest Creditors list from Landsbanki(26-Nov-10) it seems that the winding-up board is rejecting all bond applications.
I haven’t had a chance to digest that report yet, but I did see this moderately amusing line:
“The bank’s main legal advisor is Morrison & Foerster LLP (hereafter “MoFo”).”
To anonymous:
It is always important to remember that ALL investments carry risks, no matter what type. There are no investments that are absolutely safe. If you think about it seriously, you will realize that no country can guarantee their investors, whether it is stocks or bonds, or even their depositors.
This last point is very simple to prove. Just take any country with a modern western banking system, and look up the total amounts that are deposited in that country’s largest banks, and compare with the total government revenue. You can probably guess which is higher.
This is why diversification is so important. The crash in 2008 showed everyone, that you need to diversify on multiple levels, between investment types, currencies, and even countries or regions. Even then you are never really secure, but at least you manage to minimize your risk.
Not investing at all, doesn’t help either, since we have inflation eating up the value of each currency. The only investment that has hold some value throughout centuries is gold. But since you are Portuguese you probably already know about the gold inflation in the 16th century, but that was kind of special case :-).
Most of the money lost in the Icelandic banks did not go to the general population. In fact the whole banking/business/political system was owned by approximately 30-50 families, that were running the show. It remains to be seen how much of the money they borrowed will be possible to recover, but the chances are most of it is lost forever. Some of these people were very “clever” and moved their money/investments out of the country before the crash.
The Icelandic people did not live anymore beyond their means that people did in most other countries. And it is not uncommon for people in Iceland to work 12 hour days also. Some people lived high, while other were poor. Many of those that overspent or took bad risks, are now saddled with loans that have more than doubled in value, and are facing bankruptcy.
Regarding the action of the Icelandic government(s) after the crash, we the people of Iceland have been repeatedly reminding them very forcefully that they actually work for us, and not anyone else. You may not like this, but that is supposed to the role of every government to first take care of their own people. If they do not, we will reverse their decisions (like we did in the referendum), or even force them out.
As for the investigation of the “bankers”, it is still going. There are constant news of interrogations, but so far there have been very few cases brought forward. These kind of financial corruption cases are notoriously difficult to prove in court. I rather want the special prosecutor teams to take their time and get it right, rather than hurry things up too much and end up failing. That would be the worst possible outcome.
Good evening Bjarni and Bromley86,
From the latest Creditors list from Landsbanki(26-Nov-10) it seems that the winding-up board is rejecting all bond applications.
BCP Millenium (Portugal) verbaly guaranteed the bonds and explained that we would only loose money if Landsbanki or Kaupthing and BCP Millenium were to go bankrupt, which was very unlikely according to them. We never withdrew our money when the bonds were dropping in value because we believed in the “guarantee” that we woulkd get paid at the end of the term.
Little did they know that the ratings/auditing agencies have generally have had a very poor record in the last decade. I honestly do not know why Audit firms still exist in this day and age. They seldom detect problems and if they do then they sometimes turn a blind eye else the contract will not be renewed next year.
Bonds should be treated with higher priority than fixed deposits.
If I knew how unsafe Bonds were I would never have invested in any form of Bonds. I do realise now that Bonds are one of most dangerous forms of investments now, worse than shares. Generally companies and governments issue Bonds when they are already in very deep trouble.
I will discourage everyone from buying any form of Bonds, as you exchange real cash for a worthless piece of paper with all fake promises and no real guarantees. Gambling at the local casino is safer and has higher returns.
As for Iceland, if the Government got involved in the Banking crisis then they should see it through and not change emergency laws to benefit only the Icelandic people. We invested in Iceland with our blood and sweat, why cheat us out of our money?
Why don’t they grant the investors that lost their hard earned money state pensions as a sign of good faith?
Landsbanki and Kaupthing went bankrupt partly due to the Icelandic government not keeping an eye on these banks.
The British and Dutch investors were fortunate to have their governments looks after their investments legally and politically, I have not read or heard of anything the Portugese government is doing for its investors in this financial crisis.
The Icelandic people lived way beyond their means for many years too, they lived the good life while we were working 12 hour shifts to support their high level lifestyles. Has any banker or anyone been jailed for the financial crisis? No, and they might even use our invested money to hire the best lawyers and get away on legal “technicalities”.
Yes we all lost money, I guarnatee you that private banks are going to have a very hard time in convincing people to invest in them for the next 50 years as I and many investors will warn other investors of the new age banking scams.
Had I hidden my money “proverbially” under my mattress I would have been rich today and still have money. The chances of getting robbed in my own house was lower than getting “robbed” by a bank it seems.
I fully support people withdrawning all their money from European banks until they clean up their act.
Kind regards,
Anonymous
I think “anon” is “j”. J had a problem with bonds related to Landsbanki and BCP (Millenium) in Portugal. I never did understand the precise transaction, but I am certain that it did not involve an Icelandic government guarantee.
Anyway, Anon/J’s issue, whether he realises it or not, should not be with the splitting of the bank into domestic & foreign. Sure, there’s a possibility that that action was to the detriment of the creditors in general, but given that it prevented a total failure of the Icelandic economy (where a chunk of the assets were), probably not.
His real problem should be with the depositors-first aspect of the Emergency law. This article directly addresses his situation:
http://www.guardian.co.uk/business/2010/nov/07/iceland-banks-bondholders-legal-action
I doubt that there was a Portuguese aspect to the guarantee, otherwise BCP would be on the hook. The Icelandic part of the guarantee is, of course, worthless as it presupposed that there was a functioning bank. As the bank is in administration (and would be whether the domestic section was hived off or not), that is plainly not the case. AFAIK from following the Kaupthing IoM case a while back, the resolution committees are rejecting the guarantees given by the old banks to their subsidiaries, so that guarantee isn’t even in the queue. Only the original bondholder claim will be paid and, even then, it will be a miniscule fraction (not like the deposits in Kaupthing IoM/LB Guernsey, which are set to get back a decent chunk of their deposits from the rump of their banks).
Anyway, sorry but there’s no good news for you anonomous. From that article:
“in August, finance minister Steingrímur Sigfússon said that Landsbanki bondholders were “not likely to get much”"
Even if depositor priority is reversed, we’re talking about very low recoveries. Bjarni will likely have the figures, IIRC it’s more like 10% than 70% (with depositor priority it’s 0%).
To anonymous:
If you and your father lost nearly 500.000 Euros on Icelandic bonds, then then you are in the same situation as everyone else that invested in Icelandic companies. People loosing money is unfortunately what happens when private companies, including banks, go bankrupt.
You mention in your message that the bonds were guaranteed, but the key question is then WHO was providing that guarantee.
If it was the Icelandic government, then the guarantee is still good, but of course only in Icelandic kronas, that are now worth about half of their pre-crash value. You are then in same boat as everyone else that got stuck with unchangeable kronas. Only if/when the ICB lifts the currency restrictions will you be able to exchange them back to Euros.
If your guarantee was instead provided by the Icelandic banks, then its probably worthless, as they all became bankrupt.
You make a common error when you say that all the “money” was transferred to the new banks. In any modern banking system, the money is NEVER kept in the bank. Try to google “Fractional Reserve Banking” if you want to learn more about this.
What was transferred instead were some of the assets (loans) and liabilities from the old banks and any difference between the two was paid for using a new bond. If the new Icelandic banks survive the next 5-8 years, while the old loans are being collected, that bond will be fully paid for to the benefit of the old (bankrupt) banks.
The Icelandic government had to refinance all the new banks as well as the ICB, after the crash, to the tune of several Billion Euros. Just the interest cost of all this new debt is already about 15% of all government expenditures and is starting to cause severe difficulties for the treasury, resulting in very painful cuts. So no one got a free ride here.
All good in Iceland, my father lost 420,000 euros and me 77,000 euros to rebuild the country. We lost this money in their bonds.
The bonds were guaranteed, so the Iceland government created the new Landsbanki and the new Kaupthing and transferred all the money there.
These banks are now doing very well and we will never get any money back for 20 years and 10 years of our working life, simple mathematics. But it will not end that easy, I assure you.
Þór Saari was the guest on Max Keiser’s show last night, ironically it’s episode 101.
It’s up on You Tube
http://www.youtube.com/watch?v=PRREY3nOncU&feature=player_embedded#
Nothing though on this Icesave issue in particular.
We will have to wait and see until the ACTUAL agreement will be published, before we can form opinion on whether this is acceptable or not. There have been too many times, where what was presented in the news was either incorrect or did not give the full picture.
It is important to remember, the opposition in Iceland to the previous IceSave I and II agreements was not only based on the 5.55% interest rate. The “Ragnar Hall” issue, the keeping of Landsbanki recovered assets within BoE/DNB without any INTEREST PAID, and the ambiguity of the total potential liability for the Icelandic government in case some of lawsuits changes the distribution of recoveries, played also a MAJOR role.
When this new IceSave III agreement is published, if for example, Ragnar Hall himself would write another article where he states that half of old Landsbanki’s asset recoveries are still being used to pay UK/NL back for their deposit guarantees OVER 20K Euros, this new agreement is probably dead in the water, irrespective of how low the interest rate is.
In the end the final word will always have to go to the Icelandic people, that are being asked to pay for this boondoggle.
>I assume the interest free period is gone?
Down from 2 years to 9m.
We still don’t know enough about this deal to make a judgment, but assuming that it’s 2.78% variable (based on 3m EURIBOR/LIBOR), I’m not sure that it’s sensible to sacrifice 1.25 years interest free period for 0.62%. All depends how soon the bulk of the Landsbanki assets are disposed of I suppose. Given that we’ve already had an effective interest free period of 2 years, another 2 years would have taken us to a time when you might reasonably assume that a sizable chunk of the assets were liquidated.
>Under the new deal, Iceland will pay interest of 2.78 percent instead of the originally-offered 5.55 percent, which was rejected in the March referendum.
I’ve seen this in all the press and it’s quite misleading. The last firm offer was 3m EURIBOR/LIBOR +2.75% with a 2 year interest free period. The fact that Iceland had a referendum on an older offer was no doubt at least in part responsible for the landslide no vote.
”The reason for the very vague prediction of how much the Icelandic taxpayer will have to pay ”
This loop as monotonous as it is, still dont seems to ring in peoples heads, what a shame of the so called independent minds!!
I assume the interest free period is gone?