Talks between the Netherlands, Britain and Iceland on the repayment terms for loans totalling €3.8bn collapsed on Wednesday night, reports news agency ANP.

A spokesman for Dutch finance minister Jan Kees de Jager said he was ‘very disappointed’ at the lack of results. ‘Even our best offer was not good enough,’ the spokesman said.
The latest offer included a low variable interest rate which would make it cheaper for Iceland to repay the money. The loan was made to allow Iceland to pay back savers who lost millions of euros with the collapse of internet bank Icesave.
But many in the country, with a population of just 300,000 fear the repayment terms will cripple its economy. The president earlier refused to sign a repayment agreement and that plan is due to go to a referendum in March.
According to the Financial Times, the break down of the talks is raising fears that Iceland will default on the loan.