Iceland tells the UK & Dutch to swivel - Again.......

1984ReturnsForReal_2

Iceland rejects plan to repay Icesave debts


http://news.bbc.co.uk/1/hi/business/8553979.stm

Voters in Iceland have overwhelmingly rejected proposals to pay the UK and the Netherlands in the wake of collapse of the Icesave bank.
With a third of results counted, 93% of voters said "No" in a referendum.
Iceland's prime minister says her government will remain in office and continue to seek a repayment deal.
The British and Dutch governments want reimbursement for the 3.8bn euros (£3.4bn; $5.2bn) they paid out in compensation to customers in 2008.

Mr.Brown_4

I don't understand why the people of Iceland are responsible for a banks debts?

tomterm8

Mr.Brown wrote: »

I don't understand why the people of Iceland are responsible for a banks debts?

Because they are members of the EEA, and as such their banks have the right to operate on UK soil, under the condition that their country bankroles a fund that guarantees depositors money up to a fixed amount of money. It's the same terms as if a British bank was operating in Iceland.

Mr.Brown_4

tomterm8 wrote: »

Because they are members of the EEA, and as such their banks have the right to operate on UK soil, under the condition that their country bankroles a fund that guarantees depositors money up to a fixed amount of money. It's the same terms as if a British bank was operating in Iceland.

Ok thanks. Just couldn't see why they couldn't do a prepack administration thing, clear debt and come back with a clean sheet. Seems to be OK for lots of business people in this country, stuff the creditors. That bloke who sold Leeds and then bought them back for a quid for example.

aelitaman

The argument is about the limits. Under the EEA I believe that the amount that is guaranteed is 20,000 euro. What Brown and the Dutch did is guarantee 100% of the amount that Dutch and British people held at Icesave, so if they had 100,000 then they got 100,000 back not 20,000. The Icelandic govt seem to have agreed but the people are saying no only 20K to be paid.

tomterm8

Not quite true, the argument was that the EEA requires nationals of all EU states to be treated the same in liquidation. Iceland chose to bail out the entire deposits of its citizens, and so the argument was that it should do the same for all the other EU citizens.

But the icesave agreement actually went against that, for various technical legal reasons, and actually relates only to repaying the original amount guaranteed by iceland prior to tits-up.com (to 20,00 euro or so). Since Iceland is required to pay this within 3 months, and can't actually do so, the dispute is on payment terms - and the basic argument is about how long any liability should remain for, and interest rates.

The referendum was always going to be a no vote, because the Uk has already offered a better deal than the one in the legislation, anyway.

Mr.Brown wrote: »

Ok thanks. Just couldn't see why they couldn't do a prepack administration thing, clear debt and come back with a clean sheet. Seems to be OK for lots of business people in this country, stuff the creditors. That bloke who sold Leeds and then bought them back for a quid for example.

Countrys can't go bankrupt. they can just default on debts and never repay them, however.

FATBALLZ

If our government wants the money back it should get it back from the people it wrongly paid out to when the bank went bust. This country is a joke, buy a house you can't afford and you get bailed out, deposit money in a tin pot foreign bank chasing ridiculously high returns and when it all goes wrong have no fears, good old Gordon will pick up the tab. On the other hand work hard and save and nobody does you any favours, and you in fact get billed for the above stupidity of others.

aelitaman

There are a lot of Council Finance Directors that should have been sacked because they put a lot of money in Icesave. My local council had over 100million in Icesave. I think the FD took too much risk in that decisions, have they gone, no of course not.

1984ReturnsForReal_2

aelitaman wrote: »

There are a lot of Council Finance Directors that should have been sacked because they put a lot of money in Icesave. My local council had over 100million in Icesave. I think the FD took too much risk in that decisions, have they gone, no of course not.

Didn't the FSA have a few tens of millions tied up in Iceland?

:rotfl:

worldtraveller

Icelanders have rejected the latest plan to repay the UK and Netherlands some 4bn euros lost when the country's banking system collapsed in 2008.

Partial referendum results show 58% voting no, and 42% supporting the plan.

"The worst option was chosen. The vote has split the nation in two," Prime Minister Johanna Sigurdardottir said on state TV.

It is the second time a referendum has rejected a repayment deal, and the case will now go to an international court.......the European Free Trade Association Surveillance Authority, a process which could take several years.

Backers of a "yes" vote had argued the repayment deal was the best way to resolve the issue in terms of cost and risk to Iceland.

The "no" camp said the Icelandic taxpayer was under no legal obligation to pay for a private bank's losses and that the deal would put a heavy burden on the nation.

BBC News

ILW

Why did the UK government guarantee the deposits of a foreign bank?