Icesave dispute

Icesave was an Icelandic online bank with saving offers in the UK and the Netherlands. They had to file for insolvency in 2008 because of the Icelandic financial crisis on October 7th and was placed under the receivership of the Icelandic financial supervision. Icesave was the largest Icelandic bank Landsbanki.

Before the collapse of Icesave

Icesave worked in two countries, the United Kingdom (since October 2006) and the Netherlands (since May 2008).

In the UK, Icesave offered three types of saving offers: a normal current account, an Individual Savings Account, a UK-specific Kontokorrentform and bonds. The interest rate on these accounts was in excess of 6%. When the Icesave collapsed, they had over 300,000 customers in the UK with assets of £ 4 billion ( € 5 billion ).

In the Netherlands offered Icesave accounts with an initial 5.0 % interest, which was later increased to 5.25%. In the 5 months in which Icesave worked in the Netherlands, it was able to find more than 125,000 customers, einzahlten the € 1.7 billion.

Icesave was a member of the Icelandic deposit insurance fund Tryggingarsjóður. He met EU rules with the target value of 20,000 EUR per security deposit, a prerequisite to open a bank in the EU. Due to restrictions on Iceland this deposit guarantee fund was too small to to settle all claims for 20,000 euro per foreign creditors. Great Britain and the Netherlands have an additional state guarantee to £ 50,000 ( € 60,000 ) and € 100,000 increased to prevent a bank run on its banks during the financial crisis for any savings.

Collapse and consequences

On 7 October 2008 Landsbanki was placed into administration. An announcement of the Icelandic financial management stipulated that all domestic deposits are guaranteed. On 9 October 2008, the Icelandic part of the bank was spun in the NYR ( = new ) Landsbanki and 27 October 2008, the insolvency of the "residual Landsbanki " was declared.

The insolvency of the "residual Landsbanki ' Icesave the customers from Netherlands and the UK and German customers of Kaupthing Bank were affected.

On 10 October 2008, the UK Treasury decided that the assets of Landsbanki, the freeze of the Icelandic Central Bank and the Icelandic government, which could have a connection with Landsbanki. This was justified by the British anti- terrorism laws. The British government announced that it would prosecute Iceland.

The use of anti- terrorism laws in Iceland came on very strong emotional reactions to the people, the press and the government. The tense anyway since the cod wars mood between the countries reached by a new low.

Attempts to resolve the dispute

As part of the application to get on EU membership and access to aid money to the International Monetary Fund, the Icelandic government envisaged to compensate the foreign Icesave customers. Britain and the Netherlands based this demand that Iceland has committed as a member of the EEA, to dispense to ensure the free movement of capital to any " discrimination on grounds of nationality or place of residence of the parties or to the place where ".

On June 6, 2009, there was an agreement between the Government of Iceland, the UK and the Netherlands, which called for repayment between 2017 to 2023 of 3.8 billion euros and an interest rate of 5.5%.

On 2 September 2009, the Icelandic President Ólafur Ragnar Grimsson has signed a law which, although providing for the repayment of approximately 3.8 billion euros, but several modifications over the previous agreement undertook. This law was not accepted by the Netherlands and the UK. Therefore, they blocked access to IMF funds to help Iceland

In December 2009, agreed the Althing, the Icelandic parliament, with 33 to 30 majority vote a new " Icesave law" to that fulfilled the requirements of the UK and the Netherlands. The law implied a per capita cost per Icelanders of almost 11,000 €.

In particular, the population did not think much of the law, and demonstrated over and over again before the Icelandic Parliament and the President 's residence until Ólafur at noon on January 5, 2010 finally came and announced that he vetoed the " Icesave law" inlay before the nation. The Minister of State in the British Treasury, Lord Myners said about the decision of the President, that the Icelandic people, if it would decide against the Icesave law would imply that Iceland did not want to be part of the international financial system. Dutch Finance Minister Wouter Bos stated that the President decision is not acceptable, and that, " no matter what the result of the referendum was, Iceland must repay the money anyway" The Althing adopted on 8 January 2010, a resolution in which a referendum no later than March 6 of this year has been demanded. The resolution was adopted with 49:0 with 14 abstentions. Later, the date of the referendum on the March 6, 2010 has been set.

According to the Icelandic media the President's decision abroad was partly misunderstood, despite an official statement from the government, because it was not about the repayment as such, but to a national law ( especially its modalities), which he can veto a referendum wanted to undergo. The President followed a petition which was signed about 20 % of Icelanders, while the Icelandic government reacted very disappointed it.

Political consequences for Iceland

The people voted on March 6, 2010 on the Icesave law, and it remains to be seen how the problem is solved. Norway has pledged government aid put on hold, the IMF makes the disbursement of promised aid of Iceland's handling of the dispute depends. He is now accused of, he should become a bailiff of intergovernmental receivables, which is not its role. An initially feared negative impact on a possible EU - accession of Iceland by the veto of the Netherlands and the United Kingdom is officially denied by those countries.

Vote 6 March 2010

The question submitted to the voters was:

" Lög nr. 1/2010 kveða á á at breytingu lögum nr. 96/2009 to heimild til handa fjármálaráðherra, fyrir hönd ríkissjóðs, til að ábyrgjast lán Tryggingarsjóðs innstæðueigenda above fjárfesta frá Breska above hollenska ríkinu til að standa Maelstrom af greiðslum til innstæðueigenda HJA country Banka Íslands hf. Alþingi samþykkti lög nr. 1/2010 s Forseti synjaði theim staðfestingar. Eiga lög nr. 1/2010 að halda gildi? "

"The law No. 1/2010 includes an amendment to the Act No. 96 /2009. It authorizes the Minister of Finance at the expense of the Treasury to give a state guarantee for the interpretations that have been made by the governments of the United Kingdom and the Netherlands in favor of the Investment and Investment Guarantee Fund of Iceland, and authorized him to make payments to investors Landsbanki Íslands hf the paid. The Althing adopted the law, but the President refused to sign below. Should the law 1/2010 come into force? "

In the vote on March 6, 2010, a majority of 93.2 percent of voters spoke out against the law, only 1.8 percent voted in favor. The turnout was 62.7 %.

Reactions

After the referendum, the rating agency Fitch downgraded the rating Icelandic government bonds from BBB-to BB ( speculative " junk bond "). This means that Iceland has to get far less favorable conditions than before on international money markets loans.

Iceland's president said in an initial statement:

"It is encouraging that the British and Dutch governments have granted in recent weeks that the conditions of the loan repayment over which the referendum was held now, were unfair and that is in itself a great success of the referendum [ ... ] which is allow us to continue the negotiations. "

The British Chancellor of the Exchequer stated

" It's not a matter of Whether the sum shoulderstand be paid. There is no question we will get the money back but what I am prepared to do is to talk to Iceland about the terms and conditions of the repayment. "

" It is not a question of whether the sum is to be paid. There is no question that we will get back the sum, but I am prepared to negotiate with Iceland on the circumstances and conditions of repayment. "

When asked how long it would take, then, to Iceland would have repaid its debt, the Chancellor said: " many, many years" ( " many, many years ").

Second vote 9 April 2011

After the referendum started new negotiations. On 16 February 2011, the Icelandic parliament agreed to a repayment agreement, which provided for the payment of 3.8 billion Euro 2016-2046 with a fixed interest rate of 3%. Thus, the running time was compared with the previous agreement of 2023 extended to 2046 and reduced the interest rate from 5.5 to 3%. In addition, the annual repayment amount will not exceed 5 percent of the national income. The Parliament adopted 70% over coalition boundaries of the parcel. Even now, the President refused his signature and put instead a new referendum on.

In the referendum on April 9, 2011, the voters rejected the Icesave debt repayments of the state for 57 % of the vote again. Prime Minister Jóhanna Sigurðardóttir said to the conclusion that it was the " worst possible outcome ", she spoke of a " shock" for the government and for Parliament. The English minister Danny Alexander said that now would have the courts decide. The Dutch Finance Minister Jan Kees de Jager said that the time was up for negotiation.

On 28 January 2013, the action was dismissed by the Court of Justice of the European Free Trade Association EFTA in Luxembourg.