Despite making the first payment of Icesave deposits to the UK and Holland, the matter is far from over. Iceland now stands to defend itself in court before the European Free Trade Association (EFTA), facing the charge of violating its treaty with the organisation.
While assets from the old Landsbanki have begun to be paid back Icesave depositors in Britain and the Netherlands, the fact still remains that when the banks collapsed in October 2008, Landsbanki made a fateful decision: Icelanders were able to withdraw from their deposits, but many – if not most – foreigners could not.
This decision may have been a violation of Iceland’s treaty with EFTA, and as such, the Icelandic government will have to appear in EFTA court to answer for it, RÚV reports.
Jóhannes Karl Sveinsson, who sat on the last Icesave negotiations committee, told reporters that should the court find Iceland liable, they will likely ask the Icelandic government what sort of compensation they intend to offer the UK and Holland. He believes it likely that the government, should it face such a ruling, would not appeal the decision.
That said, he emphasised that it is impossible to tell at this stage how the court will rule, and a verdict on the matter could take up to a year.
Parliament went into recess because of the matter this morning. Minister of Economics and Business Árni Páll Árnason met with the Foreign Affairs committee to discuss the case further.