Iceland announces deal for British, Dutch savers

Iceland said on Sunday that it has reached a deal with the Netherlands, Britain and other European countries on to repay hundreds of thousands of savers whose money is frozen in Icelandic bank accounts.

A conflict between Holland, Britain and Iceland over how the money would be reimbursed has led to delays in the approval of a 4.8 billion euro IMF aid package for crisis-hit Iceland.

Details of the weekend’s deal have not been released.

Earlier, the Netherlands had reached an agreement with Reykjavik on paying back 120,000 Dutch savers who have put a total 1.6 billion euros into the internet bank Icesave. Some 20,800 euros was to be paid by Iceland with the rest – up to 100,000 euros – coming from the Dutch government. The Netherlands was prepared to lend Iceland 1.3 billion euros to make its Dutch repayments.

But at the end of last week it appeared that Iceland was not going to honour this agreement and would instead force savers to go to court to recover their money.

Obligations

The Dutch finance ministry told news agency ANP on Sunday that Iceland’s statement means the country recognises it has obligations to small savers all over Europe. At the same time, the EU recognises that Iceland is in a difficult financial situation and needs help to repay the loans, the ministry said.

"We expect this agreement can now be speedily put into place and there will soon be clarity on when people will get their money back," a finance ministry spokeswoman was quoted as saying. She said it is not clear if people with more than 100,000 euros in Icesave would get all of their money back: "First we have to ensure everyone gets the 20,800 euros. Then we will look at the rest."