Iceland Walks Out of Icesave Talks

A friend sent me this Bloomberg report published yesterday. This is really a follow up on the post I wrote a couple of months ago. As expected, Iceland is walking out of the talks about Icesave, and the government is not going to force the Icelandic people to bailout their failed bank. Why should they anyway?
Feb. 25 (Bloomberg) -- Iceland walked out of talks with the U.K. and Netherlands on how to settle foreign claims, after both sides failed to reach an agreement on the terms of a loan the north Atlantic nation needs to cover depositor losses.
The government of Prime Minister Johanna Sigurdardottir has been trying to resolve the so-called Icesave dispute since the failure of Landsbanki Islands hf more than a year ago left thousands of U.K. and Dutch depositors wondering how to recoup their savings, triggering an international spat that has stalled the island’s international bailout. A government level agreement was blocked last month after President Olafur R. Grimsson said the bill needed to go to a referendum.
A U.K. Treasury official today said the British and Dutch governments are disappointed because Iceland has rejected the “best offer” that could be made available. The two countries had proposed a floating interest rate on the loan instead of the fixed rate originally agreed.
The existing accord is due to go to a March 6 referendum, which most polls show Icelanders will reject.
The great new piece of information is that last line. It's hard to believe that the people would actually freely vote to approve from themselves to pay out about $41,000 each to bailout the British and Dutch citizens who have been fooled by abnormally high interest rates.

No comments: