UK and Netherlands offer new Icesave deal

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The Independent Online

Iceland: The Netherlands and Britain are proposing a new debt repayment deal with Iceland which may save the island nation holding a referendum on the "Icesave" crisis.

The offer's main feature is believed to be a floating interest rate designed to ease Iceland's burden as it repays $5bn to the two European Union countries. The offer maintains other elements of a deal the three sides agreed in October, including full debt repayment and a seven-year grace period. The offer is reportedly designed to address the Icelandic government's primary concerns about the existing arrangement while guaranteeing a "reasonable" rate of interest for its creditors. Iceland has been pushing for a new deal with the two European nations before a referendum on the issue. Opinion polls suggest a bill setting out terms of the repayment will be rejected by Icelanders who view the October deal as too harsh.