Dutch €1.3bn loan to Iceland agreed
Thursday 20 November 2008
The Netherlands has finalised a €1.3bn loan to the Icelandic government to enable it to pay back Dutch savers who put money into bankrupt internet bank Icesave, the finance minister confirmed to the Financieele Dagblad on Thursday.
The loan is one of a package with a total value of €5bn which the Netherlands, Britain and Germany are extending to Iceland to compensate savers, the paper said. Icesave was active in all three countries.
The ministry spokesman said the money would be enough to pay back Dutch savers but did not mention the position of local government loans. Some 22 local authorities have a combined €220m frozen in Icelandic banks.
Iceland is responsible for the first €20,887 of savings held by private individuals with the Dutch state paying the rest, up to a maximum of €100,000.
On Thursday, the International Monetary Fund finalised a $2.1bn loan to Iceland to 'restore confidence and stabilise the economy'. Scandinavian countries are to provide a further €2.5bn in loans.
The Netherlands, Britain and Germany issued a joint statement saying they welcome a statement by Iceland in which it says it will honour its commitments to savers and had voted in favour of the IMF package.