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Iceland within days of repayment deal with U.K., Dutch

Thousands demonstrate in Reykjavik in November, 2008, calling on government officials to resign in wake of financial crisis


Iceland is within days of reaching a deal with Britain and the Netherlands on repaying the more than $5-billion paid to Landsbanki Icesave accounts holders after the bank collapsed, according to a report late on Saturday.

Britain and the Netherlands covered the losses of British and Dutch account holders in the Icesave accounts after the Icelandic bank collapsed in October 2008 and have been trying to recover the money from recession-hit Iceland.

Agreement has been reached on all the main points of a new deal between Iceland, Britain and the Netherlands, with the money to be paid back at an interest rate of 2.78 per cent, and the deal would be ready in the next few days Icelandic television stations Channel 2 said, citing unnamed sources.

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A few issues are outstanding, but negotiators are in constant contact, it said.

A Dutch Finance Ministry spokesman said there was no deal yet and reiterated comment from last month that progress had been made and the outlines of an agreement had been drawn.

"In parliament there has been discussion of an interest rate around the level of the Dutch state's funding cost, which is lower than 5.5 per cent, but not that low," the spokesman said, referring to the 2.78 per cent level.

Icelanders rejected a previous agreement with a 5.5 per cent interest rate in a national referendum last March.

The draft agreement has been presented to SA (the Confederation of Icelandic Employers) and officials of Landsvirkjun (the National Energy Company).

Representatives of the finance ministry have said in confidential meetings that the new agreement is favourable to Iceland, according to Channel 2.

Iceland's finance ministry said on Nov. 16 it hoped to secure a final resolution on the so-called Icesave debts with Britain and the Netherlands in the next few weeks.

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