Britain to Lend Iceland Money!!

dancingfairy

Yes really, that's what the BBC is saying on the news. I can't find it on their website but if I see any links I'll post them up. I think it was 2.2 billion we were going to lend them. I can't see this going down too well to be honest - I hope the BBC has it's facts wrong or there will be a huge public outcry. I am outraged on behalf of all those that are desperately trying to get their money back. Don't suppose the government can do anything though if we are part of the IMF and it's their decision to lend the money out.
df

opinions4u

It is probably the UK lending the money to Iceland to cover their liability to British savers (approximately the first £16k per account if I recall).

http://newsvote.bbc.co.uk/1/hi/business/7738874.stm

Or may be not!

bryanb

https://www.icelandreview.com has an interesting slant on things if you follow the links back a few days

dancingfairy

Still seems ridiculous though - why do we have to lend them money to pay our citizens - doesn't make sense to me - or maybe our country is looking to get the interest for it. Grrrrrrr.

The BBC said that we were as a country lending 2.2 billion which I can't find a mention of anywhere. Especially since the whole IMF loan is less than that figure.

1echidna

I think you may be referring to a $2.1bn IMF loan http://news.bbc.co.uk/1/hi/business/7738874.stm

Must say with Iceland in financial meltdown I would expect them to qualify for help just like any other country. I am an Icesave depositor and would not expect Icelanders to starve just because their banks failed.

opinions4u

dancingfairy wrote: »

Still seems ridiculous though - why do we have to lend them money to pay our citizens

1) They don't have the money, their country is bankrupt.
2) The UK Government is keen to repay all British savers exposed to Iceland.
3) By lending them the money to pay the share they guaranteed via their compensation scheme, it means the UK Government gets the money back over time. Surely better than not refunding savers or simply making the British taxpayer pay the lot.

qamwc1

It's a shame their Prime Minister didn't face the reality of their obligations to UK and Netherlands - he did not want to cover obligations arising from the passport scheme, the EU just couldn't allow that. The IMF and Nordic loans were put on hold until this was resolved.

The UK loans for the Icesave obligations are being covered from the bank assets and any shortfall from the Icelandic government - it will be a long them before they finish repaying.

JayTee99_2

one point not being covered is that Iceland wanted to ditch ALL liabilities concerning Icesave, it was only when the EU made it a condition before the latest loan could be agreed, that Iceland finally had to agreee!
Before the IMF loan could be agreed, Iceland was forced by the EU to agree to accept liabilities concerning Icesave
although no time frame worked out yet,

We accept the EU directive on deposit guarantees and will undertake the obligation to pay what Landsbanki assets will not cover,'' Prime Minister Geir Haarde told reporters in Reykjavik

British and Dutch officials have insisted that the government reimburse international depositors and not just those in Icelend.
To help resolve the conflict, Iceland agreed to accept liability on deposits up to the 20,887 euros ($26,563) required under EU law, Foreign Minister Ingibjorg Solrun Gisladottir said on Nov. 14. Iceland had initially said its deposit guarantee would only cover domestic savings.
``We are isolated when all 27 EU member states agree that we have to reach an accord on Icesave,'' he said.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYdJ9xaLofv4

bazster

I saw it on the news last night, it's not that HMG has handed £2.2bn to Iceland, it's the £2.2bn which HMG is paying out to us Icesave account holders, which Britain is now effectively owed by Iceland.