Iceland's talks of repayment fall down

The talks on how Iceland will repay the more than 3.8 billion euros of debt it owes to the UK and the Netherlands reported broken down today, without agreement.

According to reports on the BBC, the three governments have now been unable to agree on revised payment terms - despite a full week of negotiations. The talks had come to try and resolve the issue that had arisen after the Iceland-based Icesave online bank collapsed back in October 2008. Savers in both in the UK and the Netherlands were majorly affected.

Both UK and Dutch governments have been seeking repayments from Iceland having already compensated savers themselves. According to Iceland's finance minister Steingrimur Sigfusson, the failure to reach an agreement marks a significant blow. "We had had hoped to be able to reach a consensual resolution of this issue on improved terms, but this has not yet been possible," he said.

Best offer

Meanwhile, in a joint-statement, the UK and Dutch governments said they were "very disappointed that despite all the efforts over the past year and a half, Iceland is still unable to accept the "best offer" on the Icesave loan.

The statement added: "We have consistently supported Iceland's economic recovery and our latest proposal built upon this, offering the Icelandic government the same interest rate as their current loan from the Nordic countries and, in addition, an offer to waive interest for the first two years amounting to 450 million euros.

"This money is still outstanding to UK and Dutch taxpayers and we remain committed to reaching a final agreement with Iceland in due course."

Matthew Buttell

Matt Buttell graduated from Bath Spa University in 2006. Since then he has written for several publications, before moving to the web. He now writes solely for the internet, continuing to cover key business issues while managing his own personal blog.

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