Thursday, December 31, 2009  Iceland Other stories from Iceland 1 July 2018: FIFA World Cup 2018 day 12, 13, 14, 15: Iran, Nigeria, Germany, Senegal out of the tournament 27 June 2018: FIFA World Cup 2018 day eight, nine, ten, eleven: Belgium, England confirm knockout phase qualification; Poland, Costa Rica miss out Last 16 18 June 2018: FIFA World Cup 2018 day three: France, Denmark and Croatia wins three points; Argentina shares the spoils with debutants Iceland 5 July 2016: UEFA Euro 2016, quarter-finals: France defeats Iceland 5-2 30 June 2016: UEFA Euro 2016, Last 16: Italy-Spain and England-Iceland ... Location of Iceland The Icelandic Prime Minister Jóhanna Sigurðardóttir and her coalition government narrowly escaped a commitment to resign as a €3.8 billion bill to repay British and Dutch savers following the collapse of Icesave online banking passed. The vote margin was only three votes. Only a matter of hours before the anticipated final vote, Wikileaks announced the disclosure of one of 23 documents suppressed by the Icelandic Minister of Finance: an apparent legal summary of meetings between Icelandic and EU representatives held in Brussels in November 2008. The leaked document discusses the then-assessed liabilities of Iceland at 60% of GDP, considerably higher than the reported 40% which repaying Icesave deposit holders entails. Amongst the other details in the report is emphasis of the deep-seated anger of the Icelandic people at the situation around the financial collapse, particularly the UK's use of anti-terrorism legislation in its approach to the country's banks. Iceland's interpretation of the situation, and its financial treaty obligations with the EU, considered foreign deposits lost through force majeure. All 27 EU members disagreed with Iceland's interpretation and Peter Mandelson, although he resigned from the Barroso Commission in October, presented the legal position that Iceland could not pass legislation that did not ensure treaty-mandated minimum balance returns from failed Icelandic banks. Leaked private communication from Ingibjörg Sólrún Gísladóttir, Iceland's then-foreign minister, compared the potential liabilities the country faced with the reparations imposed on Germany by the Treaty of Versailles in the wake of World War I. Three banks failed in the financial crisis: Kaupthing, Glitnir, and Landsbanki. As the list of creditors emerged it was found that, among others, UK councils had around £900 million with the banks. Landsbanki agreed to repay the majority of funds held, giving council depositors priority status. Approximately £200 million on deposit with Glitnir is at-risk; the bank has stated the councils will be treated equally with all other creditors seeing them likely to only recover 30% of the amount Glitnir held. Kaupthing faces other difficulties. The UK's Serious Fraud Office began an investigation earlier this month into the bank's UK activities. At issue are allegations savers were misled into selecting one particular account type, plus suspicious financial activity suggesting substantial amounts were moved out of the bank in the days prior to its collapse. At present, UK councils have received little more than ten percent of their over £900 million deposits. They are among over 8,500 creditors claiming a staggering total of £20 billion. The largest single claimant is the British Depositors' and Investors' Guarantee Fund seeking €5 billion, and, of some note, Formula One racing team Williams claiming around £10 million in unpaid sponsorship from Glitnir who took on the liability from the Icelandic buyers of Hamleys. Debt to 84% government-owned Royal Bank of Scotland (RBS) by Glitnir stands at around £500 million; much of the actual debt written off in 2008 as RBS posted £24 billion losses. Further write-offs by the bank are expected to total less than £50 million. Icelanders resented the discovery that fifteen senior ex-employees of Landsbanki claim €14 million between them, including a single claim of €2.7 million. Suspicion exists that the banks arranged substantial interest-free loans for various of their shareholders and executives. Today's announcement of the Icelandic government's agreement to pay out €3.8 billion keeps their application for EU membership on-track, although each one of the country's 320,000 citizens effectively faces a €12,000 debt. "Iceland approves new Icesave deal" — BBC News Online, December 31, 2009 Reuters. "Iceland Deputies Brace For Icesave Vote" — New York Times, December 29, 2009 "Iceland begins last repayment debate" — Radio Netherlands Worldwide, December 28, 2009 Hamish Rutherford. "RBS 'owed £500m' by Glitnir" — The Scotsman, December 28, 2009 Emma Wall. "Iceland's Glitnir 'owes' £10m to F1 team Williams" — The Daily Telegraph, December 20, 2009 "Councils seek Iceland cash from Glitnir bank" — BBC News Online, December 17, 2009 "British Councils Threaten to Sue Iceland's Glitnir" — Iceland Review, December 16, 2009 "Highest Claim to Landsbanki ISK 925 Billion" — Iceland Review, November 18, 2009 Rowenta Mason. "UK freezing of Landsbanki assets 'as damaging to Iceland as Treaty of Versailles'" — The Telegraph, July 6, 2009 Wikileaks: Icesave/EU7 - December 30, 2009
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