From Iceland — Iceland Rejects ESA Charges

Iceland Rejects ESA Charges

Published March 9, 2012

The Icelandic government has officially rejected charges from the European Free Trade Agreement’s (EFTA) that Iceland broke international law in its handling of the Icesave crisis. The matter is expected to go to court this year.
As reported, EFTA believes Iceland may have broken the terms of the country’s treaty with the organisation by delaying repayment to foreign depositors in Icesave. As such, they are taking Iceland to EFTA court over the matter.
Specifically, EFTA contends that part of the treaty dictates that governments ensure depositors of any national origin should be able to withdraw their many from a bank within an EFTA country. But when Icesave collapsed, the decision made at the time was to allow Icelanders to withdraw their money, and no one else.
Although the governments of the UK and Holland have paid Icesave depositors, and Landsbanki has begun repaying the Icesave debt, the delay is considered by EFTA to be a violation of this party of the treaty.
RÚV now reports that the Icelandic government has rejected the charges, denying any violation of the treaty.
EFTA’s response to the report is still pending, but an official rejection of the charges will very likely mean Iceland will have to go to court over the matter, unless a settlement between the Icelandic government and those of the UK and Holland is made.

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