Iceland appeals for leniency on loan

Thousands of people have taken part in a demonstration in Iceland to protest against a law to compensate the Netherlands and Britain for losses resulting from the collapse of the Icelandic bank Icesave, reports Friday’s Financieele Dagblad.

Under a deal agreed by Iceland and the Netherlands, the Icelandic government borrowed €1.3bn from the Dutch government at the end of last year to compensate the 120,000 Dutch clients who lost money when Icesave went bankrupt.
But the deal requires formal approval from the Icelandic parliament and the public demonstration in Reykjavik is expected to give the government enough ammunition to renegotiate the conditions of the loan, says the FD.
The prime minister of Iceland Johanna Sigurdardottir on Friday asked both the Netherlands and Britain (which has a similar agreement) for understanding.
‘It is in the interests of all those involved that Iceland is given time to pay back its loans’, the prime minister is quoted as saying.
In October 2008 Iceland agreed to pay the first €20,887 to Dutch Icesave customers, while the Netherlands will guarantee the rest, up to a maximum of €100,000.

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