Dutch lend Iceland money for Icesave payback

The Dutch government is to lend money to Iceland which will then use the cash to repay Dutch savers with accounts at Icelandic internet bank Icesave. Finance minister Wouter Bos and his Icelandic counterpart Arni Mathiesen agreed on the arrangement after meeting in Washington this weekend.

Icesave - a subsidiary of Landsbanki - successfully reeled in 120,000 Dutch savers who had deposited a total of 1,6 billion euros with the bank since June. Those accounts have been frozen since last Monday.

Iceland nationalised its three biggest banks last week and could not meet European agreements which make it responsible for paying back up to 20,887 euros per customer.

Dutch savers had an average of 13,333 euros in their Icesave accounts. The Dutch government guarantees savings from 20,887 euros to 100,000 euros per person.