The EFTA surveillance authority, the ESA, has ruled that the Icelandic authorities are required to pay out the minimum insurance amount on Icesave deposits in the UK and Netherlands.
The ESA ruling came in the form of a 24 page document sent to the Icelandic government today.
The amount in question is up to a maximum of EUR 20,000 for each Icesave account.
The ESA has always been of the opinion that Iceland is responsible to pay and demanded a formal response from Reykjavik which was sent in May. After analysing that response in great detail, the ESA did not change its opinion: Iceland must pay up.
After two Icesave repayment deals were toppled in public referendums, Iceland’s official position is that the bankrupt estate of Landsbanki bank should pay the British and Dutch back — something it now appears the bank will be able to do in full.
The ESA document states that if the Icelandic government does not pay up, the organisation will take the case to the EFTA court. The Icelandic government publicly stated at the time of the last referendum that the case would probably go to court and the country’s finance minister said he would like it to happen as soon as possible.
If Landsbanki is able to fully pay up, the EFTA court case would purely be about whether or not the Icelandic government should pay interest for the time Britain and Holland spent waiting.
The full ESA Report can be read, in English, here.