Icesave draft details come to light

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.

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