From Iceland — DV Posts Revealing Email From Icesave Negotiation Committee Advisor

DV Posts Revealing Email From Icesave Negotiation Committee Advisor

Published March 3, 2010, the on-line version of local tabloid DV, has just posted an e-mail (reproduced below) from Donald J. Johnston, adviser to the Icelandic Icesave negotiation committee.
In the email, which was sent on February 24, Johnson says if the British and Dutch remain uncompromising on their final offer, “Iceland should stop being ‘Mr. Nice Guy'”. Furthermore, he outlines four steps the government should take to both resolve the dispute and avoid holding Saturday’s national referendum.


Email from Donald J. Johnston:
From: Donald J Johnston [] Sent: den 25 februari 2010 21:58
London 2/24/10
Possible options re the British and the Dutch if further negotiations are refused
If the British and the Dutch refuse to negotiate further and indeed stick with their “final offer” I believe Iceland should stop being “Mr. Nice Guy” and take off the gloves.
At the moment they are treating Iceland as an ungrateful debtor and a supplicant for mercy. They try to dictate every aspect of this effort by Iceland to reach an amicable settlement even to the point of saying how many representatives of Iceland can be at the table.
They are behaving with incredible arrogance and convinced that they have an air tight legal case which they do not.
They are both in very unstable political environments and changes of government may very well take place in a matter of months (UK) and immediately in the case of the Netherlands.
Their treatment of Iceland has been decried by the most influential journals and that will intensify as if this behavior continues. (“Bullying” comes to mind and it is a popular word at the moment in the British media).
If there is no breakthrough today, I suggest the Minister make the following statement (or something similar) at a press conference flanked by members of all opposition parties :
“It is important for the people of Iceland to understand why an agreement has not been reached with the British and the Dutch establishing how the Icesave dispute can be resolved. The earlier proposed agreement incorporated into legislation on December 30th but not signed by the President is to be put to a national referendum on March 6 in accordance with the Constitutional requirement.
At a meeting in the Hague in mid February the British and Dutch Ministers insisted on four conditions to be respected in arriving at a satisfactory resolution of the dispute, namely:
i) a full repayment of the principal amounts advanced by their respective governments to ensure the repayment of Landsbanki depositors to the credit insurance limit in their respective countries.;
ii) Reasonable compensation for the cost of the loans (interest);
iii) Cross party support in the Icelandic parliament as well as the support of the President of Iceland;
iv) Solution shall be arrived at in the short term.
We moved rapidly to seek cross party support and after intensive negotiations obtained all party approval for a proposal which:
A) guaranteed full repayment of the principal amount of some 5.5 billion dollars through the liquidation of assets of the Landsbanki estate;
B) any shortfall evident by 2016 to be paid by the Iceland government over a period of years with interest. Some safeguards were built into the payment scheme to protect the integrity of the Icelandic economy in any one year of payment;
C) an undertaking to accelerate as much as possible the liquidation and distribution of the bankrupt estate;
The opposition parties united behind this proposal. However, it was rejected by the British and the Dutch as not meeting their requiremnts. They returned with a “final offer” making some accommodation on interest but falling well short of what could bring cross party consensus, a condition they themselves had insisted upon.
Therefore, to move towards a resolution of this dispute while honoring any obligations Iceland may have and avoiding the necessity of a national referendum, we will immediately present legislation to Parliament which will:
i) repeal the law which is the subject of the referendum and cancel the referendum itself;
ii) set forth the proposal upon which the government and the opposition parties agreed but which was rejected by the British and the Dutch;
iii) set forth other options for settlement which have been developed in cooperation with the opposition parties;
iv) authorize the government to continue to negotiate and seek a definitive agreement with the British and the Dutch, any such agreement to be subject to ratification by not less than ____% of Parliamentarians.
In the meantime we will try to expedite the process by proceeding in accordance with the offer made to the British and Dutch to seek a distribution of the assets of the estate pro rata to them as quickly as possible with interest payable on any shortfall in their advances from 2016 in accordance with our proposal and upon which all parties agree.”

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