From Iceland — New Icesave Offer Could Cost Iceland Much Less

New Icesave Offer Could Cost Iceland Much Less

Published September 16, 2010

The business magazine Viðskiptablaðið is reporting that British and Dutch authorities are asking Iceland to put forward an offer in the Icesave matter that would be much less costly for the Icelandic government.
Sources close to the magazine report that the offer will be between 30 and 50 billion ISK, significantly lower than the previous “final offer”, which was 100 billion ISK. The new offer will have 25% to 50% of the offered money paid at once. It is also reported that the National Bank of Iceland will have a part in paying down this debt.
The reason why the British and Dutch are asking Iceland to make an offer, as opposed to simply making an offer themselves, is that the British and Dutch cannot, according to international law, dictate the terms of payment on a nation in debt to other countries. Once the indebted country makes an offer, however, the countries owed the money are welcome to accept or reject the offer.
The new offer is actually built upon an offer that was made last February, but was subsequently rejected by the British and Dutch. That offer had the British and Dutch paying back up to 20,887 euros to every Icesave depositor in their countries. The loan that was given to Iceland would then be paid back over the next six years, with no interest paid until 2012.
The event marks a turning point in negotiations, and might indicate that the previous hard line the British and Dutch have taken with Iceland may finally be softening.

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