The Icelandic Foreign Minister and the country’s former Minister for Health, who resigned on Thursday, were interviewed on BBC Radio 4’s World at One programme Friday lunchtime.
“We don’t like it when we get the International Monetary Fund, the European Union acting on behalf of the British and Dutch governments forcing us to pay what is more than our due,” former minister Ogmundur Jonasson told the programme.
Jonasson said that Icelanders want to pay what they are responsible for paying, but that they do not like British and Dutch blackmail. When asked specifically whether he felt the two countries are blackmailing Iceland, he responded that they are.
He continued by saying that Iceland wants to take the issue to a European court to have the country’s responsibility assessed fairly; but that the British and Dutch are using the IMF and the EU as weapons to force the country to accept more debt than it is responsible for.
Meanwhile, Foreign Minister Ossur Skarphedinsson said that the British and Dutch authorities are on the brink of forcing the issue too far and adding a political crisis on top of Iceland’s economic and currency crises. But, he said, the two countries should be aware that a new government would have no more success than the current one and could potentially leave the UK and the Netherlands without any repayment.
The interviews can be heard here. They are part of the first section immediately following the news summary.
The IMF money is coming from the EU’s coffers. Don’t you think that they are entitle to have a say on who it is lent to?
Here is the BBC iPlayer link:
http://www.bbc.co.uk/iplayer/console/b00mvd4g
This link is valid for only another 5 days, so perhaps the interview will also be hosted elsewhere…
As far as I know, there is a guarantee limit of EUR 22.800 for each depositor. I have understood that the Dutch and the British are claiming that Iceland shall pay alsos for amounts higher than this limit. How can they, and if so what’s the point with the guarantee?
Incorrect Rolf. UK/NL claim is for the guarantee only.
To Rolf-Norway:
>>>>I have understood that the Dutch and the British are claiming that Iceland shall pay alsos for amounts higher than this limit. How can they, and if so what’s the point with the guarantee?
Its a bit complicated. First thing to realize, is that there are two separate processes going on here. The bankruptcy proceedings of Landsbanki and payments from the deposit guarantee funds.
The old Landsbanki is being dissolved, and priority claimants will be paid percentage of their claim from recovered assets. This is being done according to current Icelandic laws, which give priority to depositors. The current estimate is that priority claimants will get somewhere around 75%, which can of course change later.
The other process is the deposit guarantees, by Iceland, UK, and Netherlands. For Landsbanki, Iceland guaranteed 100% in ISK for domestic branches, but did not pay them out the actual money. According to IceSave agreement, Iceland also guarantees the first 21K for the foreign IceSave depositors. It is currently negotiating the loan terms with UK/Netherlands for this amount (total about 4B euros), since it did not have the foreign currency to pay them out directly.
UK guaranteed 100% for their domestic IceSave depositors and did pay out all the money (about 7B Euros), while Netherlands guaranteed 100K Euros for their domestic IceSave depositors and paid all of it out also (about 2B Euros).
The question then becomes, out of the Landsbanki bankruptcy proceedings, how much of the 75% should Iceland get for each depositor, and how much should UK/Netherlands get. According to Icelandic laws, each depositor case is treated separately, and then Icelandic deposit guarantee fund would get repaid the first 21K, and UK/Netherlands the rest.
UK/Netherlands didn’t like this and negotiated that in this case Icelandic deposit guarantee fund would have to pay the difference so their funds would get equal share. This was placed in a secret agreement called Settlement Agreement that only became public late in the summer. This extra payment will likely cause Iceland to have to pay approx. extra 1B Euros on top of the 21K guarantee, assuming the 75% recovery rate.
This was one of the critical points, that caused the Icelandic parliament to add the amendments. They therefore include the clause, among other things, that the bankruptcy payments have to be done according to Icelandic laws.
Needless to say, UK/Netherlands don’t like these amendments at all, and want to make sure Iceland still pays the difference.
Then it would be EUMF – EU Monetary Fund. But it’s called “International” for a reason, Peter. ;-)
it sounds like iceland is getting shaken down by UK and Netherlands for deposits which weren’t guaranteed. Screw it, UK and Netherlands put deposits in high-risk accounts and lost. it’s their loss, not Iceland’s. Tell them to take a hike and get a life.
>Tell them to take a hike and get a life.
Cool. Then, with that reasoning, you’ll have no problem with the UK/NL response (namely applying pressure via the IMF/EU).
I have a hard time getting this ! how come ewery one is claiming from me to pay for private companies that fail ???
This where not Icelandic state companies, these banks where private and those who screwed eweru one are still on the run ????
this is not between the folks of England, Holland and Iceland, this is private among shareholders !!! let´s get that in the open and clear !!!!