Prime Minister’s Office, Press Release : “I would like to emphasize that the Economic Programme in co-operation with the IMF should continue without interruption, even though a solution to the Icesave matter will be postponed because of the planned national referendum,” the Prime Minister of Iceland, Jóhanna Sigurdardóttir, said today in a letter to the Managing Director of the International Monetary Fund, Dominique Strauss-Kahn.
In the letter the Prime Minister underlines that the Icelandic Government and the Parliament, the Althingi, have, for their part, concluded all necessary steps for implemening the agreement on Icesave that was negotiated with the Governments of the United Kingdom and the Netherlands in June and revised in October.
“The review of the Economic Programme is of fundamental importance for the recovery of the Icelandic economy. Therefore it is very important that the review takes place as soon as possible, not the least in order to ensure further investment and recovery of the corporate sector as a part of the general recovery which is underway in Iceland,” says the Prime Minister.
Reykjavik, 14 January 2010
Letter send by the Icelandic Prime Minister
PRIME MINISTER’S OFFICE
Stjórnarráðshúsinu, 150 Reykjavik
tel: 354 545 8400 fax: 354 562 4014
postur<at>for.stjr.is
www.government.is
To play Devil’s Advocate in this discussion, where the topic appears to be Iceland’s obligation to pay what it agreed to in August, Per law of contract, when Iceland made its August offer it provided terms that it, by offering them, agreed to abide by. Britain and Holland rejected the offer. With that rejection that offer by Iceland was annulled. It became void. Britain and Holland demanded more draconian terms. An agreement containing the demanded terms was drafted. The draft is a proposal. The proposal was approved in the Althingi and the President sent the proposal to the Icelandic people for decision. Because Britain and Holland rejected the August offer by Iceland, that offer is null and void. It no longer exists. If the Icelandic people reject the more draconian end of the year proposal, there will be no agreement between Iceland and Britain and Holland. Iceland could renew its August offer, or Britain and Holland could reconsider and offer to agree to the terms of the August offer, but unless one or the other of those events occurs, the August offer is dead. If either does raise the August offer it will be as a new offer, and the other will have right to reject it.
This means that if the Icelandic people reject the end of the year proposal there will be no agreement and no contract between Iceland and Britain and Holland. Negotiating will have to begin afresh, from “go”, beginning with a reappraisal of the situation in light of what is known today and what conditions are today. A good deal has come to light since the days of panic that followed the collapse, and a good deal more is going to be coming to light as investigations to define the causes of the world-wide financial collapse, and how the Icelandic banks were “collapsed”, progress. The next few months will be a good time to reappraise and renegotiate.
To Bromley86:
>>>>As the UK/NL are unwilling to accept the conditions that the Althingi appended to to the agreement, that Aug/Sept law is irrelevant (other than perhaps as an intention to guarantee if the loan terms are acceptable to Iceland).
It is true that UK/NL have not so far been willing to accept the conditions/amendments passed with the Aug/Sep laws. But they can still become relevant, after the new laws have been voted down in the national referendum (as now seems increasingly likely).
Basically, the possible next step if negotiations fail, will be to request UK/NL to give a formal response whether they accept Aug/Sep conditions (publicly they never responded).
If they do not accept, then the deeply unpopular June 2009 IceSave agreement will be terminated and everyone will have to start over (which many people here in Iceland want). So indirectly, the Aug/Sep laws can possibly still become relevant.
>The pay back of IceSave guarantee already have been agreed in the August 2009 law passed by parliament and signed by the president, including the extortionate 5.5% interest over 15 year.
I’m sorry Fisy, but this is simply not true.
There are two elements here. The guarantee and the loan. If Iceland ties the latter to the former, and if the loan has yet to be agreed, then they cannot be said to have agreed to pay the guarantee.
As the UK/NL are unwilling to accept the conditions that the Althingi appended to to the agreement, that Aug/Sept law is irrelevant (other than perhaps as an intention to guarantee if the loan terms are acceptable to Iceland).
Assuming your reference to an extra 1bn euros is related to the Ragnar Hall issue, it seems that the agreement will be automatically altered as soon as an Icelandic court rules on it in Iceland’s favour. Although I haven’t seen the final version that was voted on, so it may have changed.
>They have showed that the bias in IMF is for those that does bank roll them and that those board member ( those large countrys ) simply do control the IMF. And of course it is same in EU.
Duh! :) I don’t see Iceland sharing its fishing grounds out of the goodness of its heart. All nations (or supranations) are always going to act in their own interests. That’s not to say that entities like the IMF can’t be beneficial – it’s up to the recipient to decide if they want the inevitable cost that comes with almost all help.
>If I were making the decision for the IMF, I’d have real doubts that Iceland would ever pay any money back. After all, have they had a referendum agreeing to pay back these loans yet?
The pay back of IceSave guarantee already have been agreed in the August 2009 law passed by parliament and signed by the president, including the extortionate 5.5% interest over 15 year.
What the referendum about is the December law which was passed ( just ) by Icelandic parliament and has far worse terms in favour of UK and Holland and inludes clauses to mean Icelandic tax payer pay over 1 billion EUR extra than actually is required * on top * of 5.5% interest.
I have little to add to what I said in Nov 2009 that I think is as valid today :
>This disaster control attempt by director of IMF to try and protect it reputation is too little and too late.
They have showed that the bias in IMF is for those that does bank roll them and that those board member ( those large countrys ) simply do control the IMF. And of course it is same in EU.
https://www.icenews.is/index.php/2009/11/28/icelandic-president-urged-to-say-no-to-icesave/#comment-103682
ICELAND HAS TO ADJUST TO A LOWER STANDARD OF LIVING BECAUSE ITS LIVING BEYOND ITS MEANS SWALLOW YOUR PRIDE BECAUSE IN THE EYES OF THE INTERNATIONAL COMMUNITY YOU ICELANDERS IS JUST BEGGING WITH HAT IN HAND ASKING FOR FINANCIAL HELP SIGN THE ICESAVE AGREEMENT WITH THE U.K AND HOLLAND BEFORE ITS TOO LATE OTHER WISE ICELAND DOES NOT MEAN ANYTHING TO THE UNVERSE.PAY UP AND SHUT UP ICELAND.
She forgot to say: please!!
If I were making the decision for the IMF, I’d have real doubts that Iceland would ever pay any money back. After all, have they had a referendum agreeing to pay back these loans yet?
>In the letter the Prime Minister underlines that the Icelandic Government and the Parliament, the Althingi, have, for their part, concluded all necessary steps for implementing the agreement on Icesave.
That’s like someone infertile saying they have taken the steps to conceive an ‘offspring’ – pathetic.