Darling pushes Iceland on compensation

Alistair Darling yesterday urged Iceland to ratify a Bill that would see the recession-hit country repay more than €3.8bn lost by savers in Britain and the Netherlands when the online savings bank Icesave went bust in 2008. The Chancellor, pictured right, described the legislation as "very important".

The Bill has been approved by the Reykjavik parliament but the President, Ólafur Ragnar Grímsson, has so far declined to sign it into law. He knows that the compensation package, which would be paid to the UK and Dutch governments because they reimbursed Icesave's customers, is deeply unpopular in Iceland. At the weekend he was given a petition, signed by more than a quarter of all Icelanders, urging him not to sign the Bill passed by MPs last week.

Those against the legislation point out that the compensation represents 40 per cent of Iceland's total gross domestic product, while a poll in August showed that 70 per cent of Iceland's 320,000 citizens opposed the Bill.

Despite the strength of feeling in Iceland against the repayments, Mr Darling yesterday urged Mr Grímsson to act. He said: "We have spent many, many months in very productive meetings with Icelandic authorities and the Icelandic government to enter an agreement to make sure that the money was reimbursed to us." Iceland's MPs fear that its application to join the European Union will be blocked if it fails to compensate Britain and the Netherlands. Economists believe membership of the bloc is key to reviving Iceland's economy, which has been battered by recession.

The value of Iceland's currency, the krona, has nearly collapsed and her economy declined by 8 per cent last year. It is not expected to start growing for at least another 12 months.

Landsbanki, which operated Icesave, Kaupthing and Glitnir, all collapsed after wholesale banking markets went into meltdown following the fall of Lehman Brothers. The British Government guaranteed up to £50,000 of savings for each of the 320,000 Icesave account-holders in the UK.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Content Writer - Global Financial Services

£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Web Developer - PHP

£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...

Recruitment Genius: Field Sales Consultant - Financial Services - OTE £65,000

£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Loan Underwriter

£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

A groundbreaking study of 'Britain's Atlantis' long buried at the bottom of the North Sea could revolutionise how we see our prehistoric past

Britain's Atlantis

Scientific study beneath North Sea could revolutionise how we see the past
The Queen has 'done and said nothing that anybody will remember,' says Starkey

The Queen has 'done and said nothing that anybody will remember'

David Starkey's assessment
Oliver Sacks said his life has been 'an enormous privilege and adventure'

'An enormous privilege and adventure'

Oliver Sacks writing about his life
'Gibraltar is British, and it is going to stay British forever'

'Gibraltar is British, and it is going to stay British forever'

The Rock's Chief Minister hits back at Spanish government's 'lies'
Britain is still addicted to 'dirty coal'

Britain still addicted to 'dirty' coal

Biggest energy suppliers are more dependent on fossil fuel than a decade ago
Orthorexia nervosa: How becoming obsessed with healthy eating can lead to malnutrition

Orthorexia nervosa

How becoming obsessed with healthy eating can lead to malnutrition
Lady Chatterley is not obscene, says TV director

Lady Chatterley’s Lover

Director Jed Mercurio on why DH Lawrence's novel 'is not an obscene story'
Farmers in tropical forests are training ants to kill off bigger pests

Set a pest to catch a pest

Farmers in tropical forests are training ants to kill off bigger pests
Mexico: A culture that celebrates darkness as an essential part of life

The dark side of Mexico

A culture that celebrates darkness as an essential part of life
Being sexually assaulted was not your fault, Chrissie Hynde. Don't tell other victims it was theirs

Being sexually assaulted was not your fault, Chrissie Hynde

Please don't tell other victims it was theirs
A nap a day could save your life - and here's why

A nap a day could save your life

A midday nap is 'associated with reduced blood pressure'
If men are so obsessed by sex, why do they clam up when confronted with the grisly realities?

If men are so obsessed by sex...

...why do they clam up when confronted with the grisly realities?
The comedy titans of Avalon on their attempt to save BBC3

Jon Thoday and Richard Allen-Turner

The comedy titans of Avalon on their attempt to save BBC3
The bathing machine is back... but with a difference

Rolling in the deep

The bathing machine is back but with a difference
Part-privatised tests, new age limits, driverless cars: Tories plot motoring revolution

Conservatives plot a motoring revolution

Draft report reveals biggest reform to regulations since driving test introduced in 1935