The European Free Trade Association (EFTA) has granted an extension to Iceland on the deadline to submit a defence over not paying back Icesave in a timely fashion.
While the old Landsbanki has said that with their current revenues, and the impending completion of the sale of the Iceland food store chain, they believe they could pay off the Icesave debt to the UK and Holland this spring, EFTA still fully intends to take Iceland to court over the matter. This is because when the banks collapsed in autumn 2008, Icelanders were able to withdraw their funds from Landsbanki, while foreigners could not, violating international law. Subsequent vetoes and referendums that stalled the re-payment process exacerbated the situation further.
Although the British and Dutch governments were able to cover those deposits, Iceland has still been in arrears to the UK and Holland for over three years, prompting EFTA to step in.
Iceland has been trying to put together a solid case in their defence, and RÚV now reports that the Icelandic government has been given until March 8 to do so. Tim Ward, who will be defending Iceland, brought his legal team to the Ministry of Foreign Affairs yesterday to go over the finishing touches.
The trial itself is expected to begin either before or after the EFTA court has its summer break.