Press statement from the Government of Iceland – 28.08.2009
Parliament approves state guarantee for Icesave loans
Today, following 10 weeks of debate, Iceland’s Parliament, the Althing passed legislation authorising a state guarantee for the loans granted by the Governments of the United Kingdom and the Netherlands to the Depositors’ and Investors’ Guarantee Fund of Iceland.
According to the legislation, the state guarantee will be subject to certain criteria and preconditions. These are aimed at ensuring debt sustainability and allowing Iceland to restore its financial system and its economy while at the same time honouring Iceland´s international obligations.
Prime Minister Johanna Sigurdardottir welcomed the Althing´s decision:
“This is one of the largest financial and economic issues ever faced by Iceland and it has greatly preoccupied the Althing and the people since the collapse of the banking system last Autumn. The guarantee of the combined loans from the United Kingdom and the Netherlands constitutes the single largest financial commitment ever undertaken by the Government of Iceland. Therefore, as I am sure that every parliamentarian will appreciate, the Icelandic parliament has a solemn duty to ensure an economically sustainable future for the country. This has been its goal. Its conclusion of the matter aims towards securing the recovery of Iceland´s financial system and economy. This is for the mutual benefit of both lender and borrower.”
The Prime Minister also praised the tireless efforts by Parliamentarians in the Althing to reach as broad a consensus as possible and stressed the importance of political unity in difficult times.
Following the outcome of the parliamentary process, the Government of Iceland will now consult with the Governments of the United Kingdom and the Netherlands.
Prime Minister Sigurdardottir said that her Government was hopeful that the Icesave issue would now be concluded in a mutually satisfactory manner.
Further information:
Prime Minister’s Office Rekjavik
Kristjan Kristjansson
Press Secretary to the PM
tel: 00 354 899 9352
kk@pmo.is
Ministry of Finance Reykjavik
Elias J. Gudjonsson
Press Secretary
tel. 00 354 694 1480
elias.j.gudjonsson@fjr.stjr.is
Ministry of Foreign Affairs Reykjavik
Urður Gunnarsdóttir
Press Secretary
tel. 00 354 864 9974
ug@mfa.is
I really hope the UK and Dutch governments accept this counter-offer. When you take into account the other loans that are contingent on the Icesave dispute being settled, the sovereign debt burden per Icelander is shocking. I have no wish for my friends in Iceland to be burdened harshly, especially as the AlÞing now has recognised a degree of national responsibility for the Icesave guarantees.
>ISK market is reacting very well :)
http://www.bloomberg.com/apps/news?pid=20601102&sid=aBkYKUTK0jP4
“Aug. 21 (Bloomberg) — Iceland’s plan to link its loan repayments to the U.K. and the Netherlands to the Atlantic island’s economic growth rates is “mildly positive” for the country’s credit rating, Moody’s Investors Service said.
“By flattening the debt payment profile, the government will gain more time to repair its financial position,” Moody’s analyst Kenneth Orchard said in a statement today. Moody’s rates Iceland Baa1, three notches above junk, with a negative outlook.”
Why in the gods name idiot Red-Green government did think original unamended deal was ” sustainable ” that ” Icelanders.. will make sacrifices”and that there was ” No Plan B ” still shakes my mind.
https://www.icenews.is/index.php/2009/07/29/more-members-of-parliament-against-the-icesave-deal/comment-page-5/#comment-89305
The ISK market is reacting very well :)
Prime Minister Sigurdardottir said that her Government was hopeful that the Icesave issue would now be concluded in a mutually satisfactory manner.
This is what the UK said today:
“As you would expect, the UK will look carefully at any conditions placed upon the loan to ensure that they are reasonable”
UK Treasury.
First reaction of Wouter Bos (dutch minister of finance): “I am glad about this result because it means an important step has been taken in recovering our money.
Now we are waiting for the response of the icelandic government. BECUASE WE HAVE AN AGREEMENT WITH THE ICELANDIC GOVERNMENT, NOT WITH THE ICELANDIC PARLIAMENT.”
Do not shoot the messenger, I am just translating :-)
http://www.nos.nl/nosjournaal/artikelen/2009/8/28/280809_icesave.html
Leaving aside the legalities etc of this, I really hope the UK and Dutch governments accept this counter-offer. When you take into account the other loans that are contingent on the Icesave dispute being settled, the sovereign debt burden per Icelander is shocking. I have no wish for my friends in Iceland to be burdened harshly, especially as the AlÞing now has recognised a degree of national responsibility for the Icesave guarantees.
It’s time to be pragmatic. You can’t get blood out of a stone.
“Now the voting is over and Iceland’s counteroffer has been formalised, the UK and Netherlands will be free to comment. So, I wonder if the UK and Netherlands will make a joint statement soon…”
Im sure they will, and expect they will not accept this counter offer, if they were smart they would accept because this is the only offer they will get, there is no plan B, hehe
i hope they will refuse the offer and the IMF will continue to block all loans as they have done so far, it will give us a reason to kick the IMF out of the country, if the EU decides to put some sanctions or restrictions on busyness with Iceland as seems likely right now we will find new markets,
im sure that will be a desicion that will last for a very long time.
The only thing I can see an objection to is the time limit.
If the loan repayments are limited to being affordable, what justification is there to stop paying back the loan before its fully paid back?
[…] and the Netherlands to the Depositors’ and Investors’ … Read the original post: PRESS RELEASE: Parliament approves state guarantee for Icesave … Share […]
“The guarantee of the combined loans from the United Kingdom and the Netherlands constitutes the single largest financial commitment ever undertaken by the Government of Iceland.”
Well, this legislation effectively converts a set of many guarantees (to the many thousands of individual depositors) into a pair of guarantees (to the British and Dutch states). The main difference is that the financial commitment of the former has been substantially watered-down into the latter (repayment limited by GDP growth and time limits after which any commitment disappears).
Now the voting is over and Iceland’s counteroffer has been formalised, the UK and Netherlands will be free to comment. So, I wonder if the UK and Netherlands will make a joint statement soon…