All foreign ambassadors in Iceland will be informed in detail about the current state of the Icesave bill today. European Union representatives in Brussels will be updated with the same information at the same time.
Icelandic Foreign Minister, Ossur Skarphedinsson, said yesterday that the government has been in regular contact with the British and Dutch authorities this weekend and has been updating them both on the changes being made to the bill and the progress of the negotiations on a daily basis since Friday. “We have gone over the issues in close detail with them and they have been provided with a very clear translation of the new bill,” he said to mbl.is. He added that the British and Dutch have also been informed that the bill still has its second and third debates in parliament to go and that its progress is therefore now in the hands of parliament.
The bill could see further changes as it goes through parliament, according to Skarphedinsson, but he added that the two governments have also been informed of that.
The Foreign Minister said that it is important to keep the European Union updated on the issue as well, and especially the French and the Germans, who will all be updated today. The minister would not be drawn on the initial British and Dutch reaction to the new bill, saying that their attitudes could yet change the further they study the issue. He added that he is personally confident that the changes made still fit within the frame of the original agreement, but that there is no way of being sure what the final outcome will be yet.
Steingrimur J. Sigfusson, Minister of Finance stressed that the British and Dutch authorities will continue to be regularly briefed. “I hope that they will understand,” he said. The minister also said in an unrelated speech yesterday that those responsible for the banking crisis should come out publicly and apologise for what they have done to the Icelandic nation, according to RUV.
Gudbjartur Hannesson, the Social Democrat MP who heads the parliamentary finance committee, said that there is still plenty of work to do.
Ordinary working people of Iceland have the right to say NO to Icesave, because those are the people who are expected to pay the money.
I wonder if the ambassadors are aware that Iceland is attempting to be the first country in over 80 years to subordinate its foreign debt to its ability to pay.
Joke of The Year (so far)
“they have been provided with a very clear translation of the new bill”
Anyone got a copy of that very clear translation? I saw a good summary on the Iceland Weather Report site ( http://icelandweatherreport.com/2009/08/an-accord-reached-on-icesave-amendments.html ) that was mentioned in another thread, but haven’t seen the complete official translation. It should be released by one country or another under freedom of information.
@ Balkanson Aug 17, 2009
Your government did not say no when they needed the money from Dutch and British tax payers.
If you borrow something, you have to pay it back. If such simple ethical rules are not valid in Iceland anyway, I hope my Dutch government send its marines to take what belongs to Dutch tax payers.
Just read an article in the dutch newspaper Volkskrant which states that Iceland may not pay back its debt. If, in the future, a (it wasn`t specified what kind of) judge decides that the european deposit garanty system doesn`t work during a crisis, current obligations become void.
The Icelandic government was apparently sleeping when it allowed its banks to behave the way they did and now when it s called to fulfil its international obligations they simply refuse to do so.
In my mind this clearly puts forward the question if Iceland has got the means to remain an independant nation, if it can`t live up to international obligatons it should be put under jurisdiction of a state which is trustworthy.
The icelandic government allowed the banks to take risks but can t back them up since the crisis started, simply because Iceland is such a small country.
Denmark or Norway should take over sovereignity, that way Iceland can fulfil its obligations!
The general opinion in The Netherlands is: No payments, no EU membership and I aggree. The point is that the legitimate government of Iceland guaranteed the first 20.000 Euros. No complaints from the Icelanders when everything went well. They should have known better than to host banks 8 times the size of their economy.
Ron – Excluding Iceland from the EU would hardly be a punishment when two-thirds of Icelanders don’t want to be in the EU anyway!
> Jan – “Denmark or Norway should take over sovereignity, that way Iceland can fulfil its obligations!” – So we NO or DK should pay the bill because bad/none control systems in Netherlands?
Please don´t try to tell me that people in NL/UK did not knew that Iceland banks may have problems?
As both NL and UK is mentioned as tax-paradices, – just ask BONO (NL) – perhaps to much control in foreign companies is not just wanted.
My conclution is that none of IS/UK/NL have done a clever job on the Iceland banks collapse. The best solution in my view the is.
Make a sum of the losses and divide it/make the bill relative to population in each of the countries.
@ Øystein Aug 19, 2009
IMHO, Iceland has to pay.
Here is a Dutch folk expression for Icelanders: If your burn your bottom, you have to sit on the blisters!
Øystein,
NL and UK already have paid the compensation to icesave depositors which Iceland was supposed to pay according to international agreements, but was unable to.
That is the reason that it is argued that Iceland apparently is unable to function as an independent state.
Iceland signed the deal that it would repay the UK and the NL back in 2008 and that is the deal. Only the terms of it can be negotiated, not the actual sum of money.
As for preventing the activities of Icesave: Iceland is a part of EFTA and accordingly it was not possible for dutch and british financial watchdogs to prevent the activities of icesave. Norway (not being bound by EU rules) DOES have this possibility and used it, afaik.
The dutch national bank knew that icesave was standing on shaky feet but decided not to issue a warning since this would cause a run on the deposits and would mean immediate bankruptcy (for which the dutch authorities then would face some responsibility).
However it did demand guarantees from Landsbanki and financial authorities in Iceland that :
-the number of dutch depositors would be limited
-a guarantee fund would be established in order to compensate at least 20.000 euro on each account.
The icelandic side agreed to these demands but in reality did nothing.
This is the reason that the dutch side introduced so many harsh conditions in the present agreement. This is merely a reaction to previous experiences with the icelandic side.
Apart from that I can understand perfectly well that Norway is not interested in taking over a bankrupt and indebted country like Iceland. I would not want this too if I were norwegian.
Ron said :
>The general opinion in The Netherlands is: No payments, no EU membership and I aggree
Icelanders agree too.
Majority don’t want EU member ship ( as Jim points out ).
But Icelanders do want to pay this and get on with their work to build country back up and businesses and export trade up again without more EU comission and EU member state ” help ”
Niels said :
>NL and UK already have paid the compensation to icesave depositors which
>Iceland was supposed to pay according to international agreements, but was
>unable to.
Yes, a decision taken unlaterally certainly in UKs case but the point is this aspect is actually appreciated by Icelanders — that this people did get they money back.
The UK ( 300,000 or so ) and Dutch ( 120,000 or so ) customers who got they nice interest rate and they money back are now off looking for more nice high interest no doubt.
Netherlands did act gentlemanly about it compared to UK despite your leader’s misgivings about what Geir may have said.
There was no terrorism listing and no unnecesary vindictive taking of any subsidiary banks ( like was done by UK with Kaupthing Singer and Friedlander ) by Holland.
But it is at least a good thing the money went back to their pockets and not into the gurgling drain of bank balance sheets as has happend with other general bailout moneies given to banks – which is just sent to other banks. And the rest of us tax payer are poorer. And our sons and grandsons.
But then to turn around and give this ” deal ” of starting at 6.7% with 3 or so years interest only, then ” kindly ” reduced to 5.5% and 7 years, with both UK as lead negotiator and Holand also trying to smack in the ability to take over any assets of government ( i.e. tax payers ) abroad or anywhere ..
When people get to hear of it here there is shock and disgust that this has been tried and accepted by idiots currently sitting government chairs.
Despite what Mike UK Nordic analyst may say that we can’t get money from other places.. well 1. we werent given chance to as UK and Netherlands acted so quickly to protect they own citizens f the branches, and 2. to loan someone money and then later made these high interest rate claims.. it is very clearly seen as about business and recouping as much of losses as possible.
( http://www.icenews.is/index.php/2009/07/01/iceland-icesave-deal-“there-is-no-plan-b”/#comment-84148 )
This would be fine if this was coming from assets of bankcrupt estate of banks and pockets of those that put up personal guarantees as owners of those banks — but it is not.
It is to come from tax payer pockets and pockets of our children that are now about 10 years old now but will be paying taxes then in 2016.
So it sticks in every one’s throat. And there is that uncomfortable feeling that we are being taken advantage of under the umbrella of being helped earlier.
http://www.icenews.is/index.php/2009/08/14/iceland-pm-defends-parliament’s-icesave-misgivings/comment-page-1/#comment-89408
>This is the reason that the dutch side introduced so many harsh conditions
>in the present agreement. This is merely a reaction to previous
>experiences with the icelandic side.
That may be how it was dealing with Landsbanki from point of view of regulators ( and we talked before about interesting margin calls from ECB ) but that has nothing to do with negotiating position that was put forward.
It just has that clear feel of taking advantage of situation for trying to get extra interest back into the treasury of the country.
It really is very unfortunate that we did not have government since February focussed on doing this all rights — audit and recapitalization of banks, this negotations on IceSave.
They just have squandered the time on EU application polishing and their pet ideological project like banning lapdancing and this ridiculous forcing of woman onto company boards like they have in Norway.
So from that point of view I would like to apologize for the poor state of our government.
But still that does not excuse whatever Holland and UK do next. Ball really is now in their court to treat the counter offer as if it were given back in April ( which it should have been ).
Niels said:
“However it did demand guarantees from Landsbanki and financial authorities in Iceland that :
-the number of dutch depositors would be limited
-a guarantee fund would be established in order to compensate at least 20.000 euro on each account.
The icelandic side agreed to these demands but in reality did nothing.”
There is also the issue that an Icelandic minister specifically declared that Icesave was guaranteed by the Icelandic government. The Icelandic parliament did not refute this, in fact it never announced that only non-Icelandic depositors would not be covered by the depositors protection.
If you go many years declaring that you comply with EFTA law and that the protection was in place for all depositors then surely that makes the contract valid?
“Ball really is now in their court to treat the counter offer as if it were given back in April ( which it should have been )”
Yes, but the problem is that the counteroffer is a legal joke: the additional provisos are vague, contradict the original agreements, etc. Back in April, the wording could have been negotiated in private and revised until there was something that at least had the potential of being acceptable to both sides but, with Iceland now choosing to hold negotiations in public, that’s no longer possible. Therefore, the only way this can now be resolved is probably via arbitration or court judgement. But Iceland withdrew when arbitation was previously attempted, so a full court case seems on the horizon. Anyone disagree?…
Not me. Especially as, whether the UK accept this new agreement or not, the provisos effectively say that Iceland will be taking it to court.
The key here is what the IMF does; whether the UK/NL have sufficient power and inclination to impede the IMF loans until the dispute is finally settled and whether the IMF has any reasons of its own for wanting the Icesave dispute settled ahead of any further runding.
Jim:
“But Iceland withdrew when arbitation was previously attempted, so a full court case seems on the horizon. Anyone disagree?…”
They withdrew *after* the arbitration started when they realised they would lose. As they accepted it as legal, binding and final on entry, they cannot go back to court as they have given up the right to do so.
Any other court on the planet would refuse to handle it.
I doubt this case can be solved in a court, it is a mix/sauce of EU/EEA/EFTA/UK/NL/IS of politics, regulations, actions, loss of actions, financial crime. It can only be solved political.
All countries have accepted to pay something, negotiation should end with a fair solutions – to all participents.
Investigations and courts should be used for those who are responsible for the mess and made benefits out of it.
To me the position today more look like a collective punihsment of the citizens of Iceland.
Let a group youth from each involved country – 18-25 – 50% og girls/boys do the agreements, as it will be them to pay it. They are probably also the once that are able to communicate in a normal way :-)
Jim:
>Therefore, the only way this can now be resolved is probably via arbitration
>or court judgement. But Iceland withdrew when arbitation was previously
>attempted, so a full court case seems on the horizon. Anyone disagree?…
You mean the EU commission ” kangeroo court ” arbitration attempt which could not be said to be any thing like real arbitration process. Which Iceland government with drew from for that reason.
>Therefore, the only way this can now be resolved is probably via
>arbitration or court judgement. But Iceland withdrew when arbitation was
>previously attempted, so a full court case seems on the horizon. …
Let us hope that they UK and Netherlands sue the guarantee fund here in court. That will guarantee it gets to EFTA Court.
But will EU commission want it member state UK and Holland to do this ? You bet not.
>There is also the issue that an Icelandic minister specifically declared that
>Icesave was guaranteed by the Icelandic government.
Post source will you Peter – London and maybe we will take you more serious.
>They withdrew *after* the arbitration started when they realised they would
>lose. As they accepted it as legal, binding and final on entry, they cannot go back to court as they have given up the right to do so.
In other thread you been asked nicely to post source to this ” binding arbitration ” claim and results that it seem only you know about :
http://www.icenews.is/index.php/2009/07/29/more-members-of-parliament-against-the-icesave-deal/comment-page-3/#comment-87373
If you cant post source to it here then repeating and embellishing this nonsense.
opps…wrong formatting…moderators, could you delete crewed up post pliz
Jim. Could you post the text of “original agreement”… and don’t forget to include signatures, pliz :-)
Agreement means that all sides agree on. As all sides still discussing it – there is no “original”. Sorry.
Niels, read your own words
and
So were NL authorities
1. naive
2. stupid
3. selective
or all three above when they were “soft” with just a small private company but “harsh” with the people of small country?
Merlijn, when Dutch were giving away their money to the foreign “internet bank” have they been thinking about their blisters?
Ron, you also should have known better where you give your money to. Have you checked the size of the bank’s host country? Or did you hope that this tiny “bank” from tiny country would fool someone else not you? I understand you frustration – no one likes to be a fool. But I think you should direct it to your government and private “bank” Icesave.
Peter – London. Are you deaf? Icesave UK accepted deposits from UK resident only! So Icelandic clients of Landsbanki and UK clients of Icesave are treated differently. I was Landsbanki’s client but I’ve heard about Icesave for the first time …when all this sh*t started flying around in 2008.
For all of our “friends” out there in EU. What about main principles of capitalizm – private property and free market? Icesave is private company – so all gains are private but all losses must be private too. Government might interfere only in case of criminal actions (see Niels remarks above). But so far NOT A SINGLE person told what laws were broken by Icesave.
So…are you bunch of commies guys? :-)
> Jim. Could you post the text of “original
> agreement”… and don’t forget to include
> signatures, pliz :-)
>
> Agreement means that all sides agree on.
> As all sides still discussing it – there is
> no “original”. Sorry.
Here is a link to the original agreement:
http://www.economicdisasterarea.com/wp-content/uploads/2009/06/Icesave_samningurinn_innistaedutryggingar_holland.pdf
The agreement was signed by the parties represented, but Iceland subsequently failed to meet some of the conditions precedent in section 3.1 and so the agreement did not come into force. It was nonetheless an agreement! Ye Gods…
I’ve not had a chance to look at it yet, but I believe this is it:
http://www.iceland.org/info/news/features/nr/7313
If I was the lender, I’m not sure I’d like these amendments. They’re not just about ensuring that the burden is not too heavy in any one year.
1. Limits the guarantee to an amount that may not be the whole.
2b. Transference of exchange risk from Iceland to the lenders, especially when combined with the point below.
2b. Renegotiation every time the 4%/2% is breached. Ability of Iceland to limit the guarantee if the negotiations don’t reach a conclusion. Quite sneaky this one, as it means that Iceland can write off anything over 6% of GDP per year (or 3% in the first and last).
2c. Will be going to court to establish validity of guarantee.
2c. If TIF doen’t have priority over other creditors, then the guarantee may be withdrawn. Again, transferring the risk to the lender.
“If I was the lender, I’m not sure I’d like these amendments”
Thanks for posting that link to the official translation. The text itself reads more like a stream of consciousness than clauses for a contract. There is absolutely no way the UK or Netherlands would approve such waffle for a multi-billion loan agreement. And then there are the conditions themslves (even if they were extracted from the surrounding waffle)… If anyone wants to bet against that, let me know. I’ll even give you 5/1 odds on the current amendments text not being approved “as is”. Perhaps IceNews could hold the stakes in escrow if it has a gaming licence! ;-)
Alexander,
It is not the first time you are mixing up facts and distorting words of others. In fact, I think we already had this discussion before.
But OK, I will repeat it once more:
1. Dutch authorities did not have legal means to stop Icesave entering the dutch market (EFTA regulations)
2. An official warning to the dutch public would lead to a run on Icesave and bankruptcy. Apart from the fact that this would not help anyone it would also give the icelandic side arguments for the following negotiations. I mean, many icelanders are using the actions of Brown/ Darling as the main reason for the start of the kreppa isn’t it?
They cannot use such arguments against NL.
3. The dutch financial authorities made agreements with the icelandic side which I mentioned above. The icelandic side did not live up to its promesses.
Now controlling these agreements did not happen and that is something which you can call naive. In fact, the public opinion here is blaming the financial authority for that.
But OK, if you are dealing with a friendly country which likes to portray itself as scandinavian and solid, it is not evident that 100 % control is necessary .
But necessary it was….
4. After the collapse of Icesave Iceland agreed to take a loan from NL. It is clear that this loan will have to be repaid (and please do keep in mind that I am of the opinion that the repayment should be arranged in such a manner that it is bearable for Iceland- something which public opinion here agrees to as well).
5. Now if you have been dealing with a bussiness partner which proved to be untrustworthy it is just logic that you make up a contract with provisions that provide 100 % control and make it impossible for the other side to violate it (Alexander, don’t you think your company should have done the same with its untrustworthy Lithuanian partner?). The icelandic negotiators signed the deal.
Folowing your way of reasoning I might say that if they were so stupid to sign this deal, Iceland will have to bear the consequences. And I could also ask you which international agreements were broken in the present Icesave deal :-)
But no, I will not go so far.
As for my personal opinion, I think the deal should be in a form which is bearable for Iceland, but that is it.
Is there any inconsistency in this? I don’t think so.
Talking about INconsistencies and selectiveness, aparently you consider the expansion of the icelandic banks and the cheating of depositors as a natural form of doing bussiness, but when the other side demands compensation and uses its strength to negotiate hard it is all of a sudden ‘being harsh towards a small country’.
Remember , UK and NL did not start the music, the icelandic bankers and authorities (elected by the icelandic population) did.
Alexander E. said:
” only non-Icelandic depositors would not be covered by the depositors protection.
Peter – London. Are you deaf? Icesave UK accepted deposits from UK resident only! So Icelandic clients of Landsbanki and UK clients of Icesave are treated differently. I was Landsbanki’s client but I’ve heard about Icesave for the first time …when all this sh*t started flying around in 2008.”
I’m not deaf, but you obviously have no idea what you are talking about.
Here’s something that may surprise you; your ignorance of Icesave is irrelevant.
Icesave was part of Landsbanki’s banking license.
Treating domestic and international depositors differently is illegal.
Don’t take my word for it, your government accepts it, which is good enough.
This is very interesting but also sad material to read. It’s sure the money to pay isn’t there at the moment that’s why a freeze in payments for seven years was included in the original agreement. The amandement looks unaccaptable in the sence that it doesn’t guarentee that the principle amount plus interest will be paid back. It puts a number of conditions on payments but doesn’t postpone them, as far as i can read, but just skips (part of) them. That can never be acceptable for the lender.
The income for Iceland as a state, however, will not be enough to fulfill the original agreement, that is also clear. From the lenders perspective the only solution is to stretch the term and make sure the payments have a guarenteed number one priority.
What worries me is the protectionism that one can read between the lines. I think Iceland should realize that there is not a lot to protect anymore.
The only way out of the depression and to stay sovereign in the long end maintaining a normal living standard is to open up and work together with others, especially Holland, UK and the EU. Ask for help and expertise to explore current and future assets, which are mainly energy and strategic position.