PRESS RELEASE FROM THE ICELANDIC GOVERNMENT:
* Principal conditions set by the Icelandic Althingi incorporated in supplementary agreements
* Acceptance and Amendment Agreements concluded subject to approval by Althingi of amendments to legislation
* Trilateral statement by Ministers of Finance on progress of Iceland’s Economic Recovery Programme in co-operation with the IMF
Following the entry into force of Act No. 96/2009 on 2 September this year, providing a state guarantee for the Icesave Loan Agreements, discussions have been held between the Icelandic government and the Depositors’ and Investors’ Guarantee Fund (the Guarantee Fund) and representatives of the governments of the UK and the Netherlands. These discussions have now concluded and the outcome has today been presented to the government, the parliamentary Budget Committee, the coalition party caucuses and the leaders of the opposition parties.
An understanding has been reached with the UK and the Netherlands. They accept the principal points of the conditions set by Althingi for a state guarantee with some deviations, however. The agreement provides for:
* special supplementary agreements (Acceptance and Amendment Agreements) to be added to the Loan Agreements of 5 June 2009, dealing with the references and conditions arising from Act No. 96/2009;
* a bill of legislation to be submitted to Althingi amending Act No. 96/2009, to harmonise the contents of the supplementary agreements with current legislation authorising the Minister to grant a state guarantee for the Icesave agreements. The supplementary agreements are to take effect only after Althingi has adopted the relevant amendments to Act No. 96/2009; and
* the Ministers of Finance of the three countries, upon the introduction of the bill and the signing of the agreements, to issue a trilateral statement on issues related to the substance of the agreements, including the progress of Iceland’s co-operation with the IMF and in support of the review of this co-operation.
The cabinet and coalition party caucuses have approved the resolution of this matter as described above and signing of these supplementary agreements and the submission of a bill to the Althingi is to take place on Monday, 19 October. The agreements, trilateral statement and bill of legislation will be published at that time or as soon as they have been finalised.
In drafting the agreement, the government has been assisted by Nigel Ward of the law firm Ashurst, while the bill of legislation has been prepared by District Court Judge Benedikt Bogason, Björg Thorarensen, Dean of the Faculty of Law of the University of Iceland (UI), Eiríkur Tómasson, Professor of Law at UI and Helgi Áss Grétarsson, legal expert of the UI Institute of Law, who have also provided the government with general advice.
Further details of the Acceptance and Amendment Agreements
The principal points of the supplementary agreements are as follows:
* The most important conditions stipulated by Althingi are incorporated into the Loan Agreement or stated in the bill of legislation.
* As of 2016, a ceiling will be placed on annual repayments based on references similar to those laid out in Article 3 of Act No. 96/2009, i.e. to the effect that in 2017-23 total repayments will not exceed 6% of the increase in GDP from 2008. Provisions are also added to the agreements aimed at facilitating their implementation with regard to determining GDP and the impact of exchange rate movements.
* Annual interest will always be paid and any instalments not paid in full due to the repayment ceilings will be added to the principal.
* In order to reduce the likelihood of testing the repayment ceiling, the UK and the Netherlands agree that Iceland may, at any time, unilaterally decide to increase the number of dates for payment of instalments from 32 during an eight-year period to 56 during a 14-year period. Should the lengthening of the repayment period, together with the ceiling set on annual payments, result in the outstanding principal not being repaid within the term of the agreements, the repayment period shall be further extended by a five-year period at a time.
* Iceland shall as before have the option of voluntary prepayment in excess of the mandatory amount.
* It is accepted that the Guarantee Fund may seek a ruling from competent authorities as to whether the Fund’s claims have priority on disbursements from the estate of Landsbanki Íslands hf. over other portions of claims for the same deposits. Should an Icelandic court reach this conclusion, after receiving an advisory opinion from the EFTA Court which is not out of line with the Icelandic conclusion, the provisions of the Loan Agreements stating that amounts recovered from the insolvent estate shall be divided between the Guarantee Funds pro rata to their claims shall be automatically null and void. The division shall then be in accordance with the courts’ verdict.
* It is affirmed that provisions of the Loan Agreements of 5 June this year, on limits to sovereign privileges and immunities, do not cover assets entitled to immunity under the Vienna Convention on Diplomatic Relations, the assets of the Central Bank of Iceland and assets in Iceland which are necessary for the country’s normal functioning as a sovereign state.
* It is affirmed that the Loan Agreements do not affect the state’s control of the country’s natural resources, their exploitation and the arrangements for their ownership.
* It is affirmed that the Loan Agreements have been concluded based on the so-called Brussels references.
Amendments to legislation required
The supplementary agreements have been concluded subject to the approval of Althingi and require amendments to Act No. 96/2009. The amendments proposed by the bill of legislation concern three principal points:
Firstly, the amendments include provisions on an unlimited state guarantee for the Loan Agreements with the Guarantee Fund, as they now stand following the incorporation of the conditions and references of the previous Act in the agreements, cf. the above.
Secondly, the bill includes a clear statement that nothing in the Acts, including the guarantee, implies recognition of any legal obligation on the part of Iceland for minimum guarantees on deposits in branches of Landsbanki Íslands hf. in the UK and the Netherlands. Should a competent authority reach the conclusion, in accordance with European law, that such obligation did not exist, the Icelandic government shall initiate discussions with the parties to the Loan Agreements and, as the case may be, the EU and EEA parties, on the impact of this conclusion.
Thirdly, other provisions of the previous Act are repealed which have become superfluous after their substance has been incorporated into the loan agreements. Those which do not directly impact the loan agreements remain unaltered.
Trilateral statement by the Ministers of Finance
As part of today’s agreement on the above resolution of this matter, the Ministers of Finance of Iceland, the UK and Holland will publish a joint statement once the Acceptance and Amendment Agreements have been signed, subject to approval by Althingi, and the amending draft legislation on state guarantee has been submitted. It will state that the UK and the Netherlands have, for instance, accepted the economic conditions stipulated in Act No. 96/2009 and that Iceland has reiterated its commitment to guarantee the obligations of the Guarantee Fund without this implying any recognition that a legal obligation to do so existed. Iceland’s Minister of Finance will, as provided for in the Act, monitor subsequent events and initiate discussions as necessary. Furthermore, the parties reaffirm their willingness to co-operate, for instance, through further discussions at the request of any contracting party concerning any situation which may arise and the appropriate response to such.
The statement will also reaffirm the importance of finalising the review of the Economic Recovery Programme agreed between Iceland and IMF and the parties’ support for this review.
Reykjavík, 18 October 2009
“Nope. Say what you will about British MPs, for the most part they were operating within the rules as designed, in that expenses have been used as a way to top up MPs’ salaries to the “right” level.”
You are seeing the tip of the Iceberg.
“Well, the UK’s debt is less extreme than Iceland’s as a percentage of GDP.”
How reliable is you information,
i wonder what the total amount is if everything is taken into account,
http://business.timesonline.co.uk/tol/business/economics/article6880228.ece
UK GDP is shrinking,
http://online.wsj.com/article/SB124842361764178567.html#mod=WSJ_TimesEMEA
unemployment going up,
if the icesave deal falls trough the EU who is pulling the strings behind UK/NL will try to punish Iceland, cut it off from busyness etc, then 50.000 British workers working in Icelandic company’s in Britain producing products out of Icelandic fish will loose their jobs,
The next thing Gordon will do is to get a better stranglehold on the British people, by privatizing companys in the energy sector and transport, and companys like the Royal mail,
soon you will have the IMF breathing down your neck and they will recommend replacing the GBP with euro,
the Euro being a more stable currency,
then you guys are sc*ewed like the Irish and officially EU property, the Germans and the french will tell you what to do after that,
http://www.telegraph.co.uk/news/worldnews/europe/6192906/EU-expenditure.html
it looks to me like the EU is sucking money out of Britain, France Germany Spain and Italy are getting much more from the EU than Britain,
http://www.telegraph.co.uk/news/worldnews/europe/6192906/EU-expenditure.html
and they all have lower GDP index, only Germany has a bigger population, rest is similar or smaller, the EU is taking your money, freedom and you jobs, the only thing left standing will be debt, and you will be forced to spend your lives trying to pay something that cant be payed.
“Flying Dutchman said:
:-( I find this very sad and you people have all right to be angry, it’s very frustrating.
The Vikings would have solved this Elite problem we have in Iceland with some berserk mushrooms and an Axe.
“You guys are living in a wonderland about your less corrupt mps”
Nearly everybody in Britain knows that many of our MPs fiddled their expenses. Following all the released evidence, we know they were dodgy. Many will be voted out of parliament in next year’s election (probably the biggest ever turnover in MPs at an election) and some will be prosecuted soon.
“less extreme GDP debt”
Well, the UK’s debt is less extreme than Iceland’s as a percentage of GDP. That’s a matter of fact, not opinion. But the UK will nonetheless be in the crap for years to come (tax rises and spending cuts) as it lowers the debt.
“not to mention the unique phenomenon – the corruption free banking collapse”
I think Iceland was the more corrupt, but the US and UK aren’t innocent. Don’t forget how Goldman Sachs’ tentacles and old boy network managed to create a new banking order from this crisis; lots of clever political influence to ensure tax payers billions went to AIG so it could pay GS. Then GS gives that money to its bankers as world record bonuses, when GS should instead have posted a small loss if it hadn’t received tax payers billions from AIG. Capitalism is an amazing system when ordinary people work hard to support the elite like that…
Seriously guys, you can’t say you weren’t warned :) .
Ah, but Crosby was forced to resign :) . You lot are about to put the same people who screwed your country back in charge.
Anyway, I’m no fan of British politicians. Nor am I particularly optimistic about the economy. That still doesn’t change the validity of what I said. What happened last time an Icelandic politician was jailed for corruption?
>Stick around, because some people with a back bone are soon to make the government, as it has been always before. The Social Democrat opportunists have almost run their course.
Stick around for what Fisy?
Knowless
>You guys are living in a wonderland
I think not – welcome to reality.
Bromley86 said:
“Where they claimed for duck ponds etc, that’s at worst a straight-up case of fraud. There’s no suggestion that they were more likely to favour HBOS, for example, because of it”
——————-
You guys are living in a wonderland about your less corrupt mps, less extreme GDP debt, not to mention the unique phenomenon – the corruption free banking collapse.
You do remember Brown appointee, James Crosby, who as deputy Finance Regulator was forced to resign earlier this year after it was revealed that when he was chief exec of HBOS up to 2006, he had sacked a bank manager who had persistently warned of the extremely risky HBOS bank practices.
This casino Bank cost the UK some GBP 12bn.
At best this example is political ineptness of criminal proportions, at worst it stinks of corruption at the highest levels of political office..
Spaugstofan ( Icelandic satire TV show ) had a sketch this weekend of showing 23rd October as like Friday 13th movie, with Gordon Brown in a Jason mask chasing the spine less Jóhanna and Steingrímur J. through the corridors of the government building.
I do not know what planet Jóhanna and Steingrímur are on but the Althing made it clear what was acceptable to Icelandic nation.
Why they are bringing this back now expecting some kind of different answer from Althingi is just simply crazy.
Dont worry Mike, the Social Democrat, Left Green coaliton is almost done. And with it will go any chance of the continuation of any effort into Icelandic EU application. Thank fully.
Stick around, because some people with a back bone are soon to make the government, as it has been always before. The Social Democrat opportunists have almost run their course.
according to IcelandReview, the majority -if we refer to mere statistics- moves to Norway (guess why :D )
:-( I find this very sad and you people have all right to be angry, it’s very frustrating.
May I ask you, Mike, you are leaving where to? what’s that better country?
Nice negotiations….. what negotiations?. I cant believe that Johanna and co. did this, just so that piece of **** Mr. Brown can look at himself and think that he is the saviour of European and British economy?. The man was desperate due to his own problems in the UK, and he def. wont survive next election, but Johanna caved because she sees the EU in the horizon.
Why on heavens earth is she so keen on getting into the EU, the same EU who all turned their back on an allied?. **** the EU, it is nothing but a joke and a union who cant agree on anything besides being greedy and incompetent when important world issues has to be taken.
This is the final straw for me, me an my family is leaving iceland as other 9 to 10.000 people has done.
“the UK MP expenses scandal is of the same nature”
UK MPs have to pay back dodgy expenses (even Gordon Brown has to repay £12,000). Also, HM Revenue & Customs is investigating around 25 MPs; some cases will be fraud and handed over to HM Courts Service. But the UK’s duck houses and moat cleaning are on a different scale to Iceland’s fraudulent billions. It’s obvious which is financially/economically worse, but not so obvious which is morally worse: Iceland’s dodgy bankers/businessmen or Britain’s dodgy MPs…
“i believe this was a system used by the banks to bribe people, the UK MP expenses scandal is of the same nature,”
Err, much as I hate UK MP’s , over-billing for cleaning (but prefectly legal in the rules they had) is in no way comparable to taking an £9M illegal loan to ramp the share price for billions in profit.
>the UK MP expenses scandal is of the same nature
Nope. Say what you will about British MPs, for the most part they were operating within the rules as designed, in that expenses have been used as a way to top up MPs’ salaries to the “right” level.
Where they claimed for duck ponds etc, that’s at worst a straight-up case of fraud. There’s no suggestion that they were more likely to favour HBOS, for example, because of it.
“I wonder if Icelanders will start protesting outside parliament again to try and derail this resolution as well.
”
I dont think they will, if this falls apart it will be Althingi that is solely responsible, Bjarni Ben and Sigmundur will do what they can to make this deal fail,
they want the gov to fall and get elections,
one reason is to be able to have some control of the
investigations of the banks, þorgerður Katrin who was the minister of education in the last gov and current MP for Independence party got a 900m kr bullet loan from KB to buy stocks in KB with stocks as collateral, this was done in her husbands name, they made a nice profit from this, i believe this was a system used by the banks to bribe people, the UK MP expenses scandal is of the same nature,
this is not just about icesave.
It’s reasonable to everyone but the people who will be paying it.
That all sounds reasonable to me. The British and Dutch parliaments don’t need to vote on this, so over to Althingi. I wonder if Icelanders will start protesting outside parliament again to try and derail this resolution as well.
Congratulations!!!!
A few tens of clever politicians, lawyers and “experts” decided what’s good for people of three countries. They also should be proud of the perfect cover operation to save as**es of all those – including European “leaders” and financial “gurus” – who actually responsible for the mess.
Congrats one more time!