The European Free Trade Association Supervisory Authority (ESA) has ruled that Iceland must pay up on Icesave.
As many recall, agreements on Icesave between Iceland, the UK and Holland were twice scuttled by a presidential veto, which led to public referendums that voted overwhelmingly against the terms of payment. Since then, the matter has been in a state of limbo, but it now looks as though Icesave might end up in international court.
A statement from the ESA makes it clear, in no uncertain terms, that Iceland “is obliged to ensure payment of the minimum compensation to Icesave depositors in the United Kingdom and the Netherlands, according to the Deposit Guarantee Directive.”
The ESA cites the EEA Agreement, of which Iceland is a member. Part of this agreement is something known as the Deposit Guarantee Directive, which designates Iceland as being responsible for covering the bare minimum on British and Dutch deposits into Icesave.
Mr Per Sanderud, president of the EFTA Surveillance Authority, said of the ruling, “Iceland must comply with the obligations it has subscribed to under the EEA Agreement. It must ensure compensation of all depositors under the conditions prescribed by the Deposit Guarantee Directive and without discrimination.”
The Icelandic government has three months to start taking measures to pay this money. Should it fail to do so, the matter could end up in EFTA court.
The full opinion of the ESA can be read here.