Why Iceland is not responsible for Icesave

The Netherlands and Britain have no legal foundation to try to force the people of Iceland to pay Icesave claims, writes Loftur Altice Þorsteinsson

For more than two years Britain and the Netherlands have been trying hard to force the people of Iceland to pay Icesave claims which are without any legal foundation. The EEA legislation and directives of the EU, as well as deposit insurance laws of these states have been disregarded in these attempts. Why is it that governments of Britain and the Netherlands refuse to use legal means to collect their claims, if they believe that they have any ?
On 09th April 2011 a referendum was held in Iceland on whether to accept a humiliating settlement with Britain and the Netherland. This was the second referendum which was called in order to force the Icesave claims onto the people. For the second time these claims were refused because there are no legal bases for such claims. Now the case may finally be settled in a court of law, like is the custom of civilised peoples.
Icesave was a trading name of Landsbanki Islands HF. It was authorised to operate in Britain and the Netherlands by Financial Services Authorities of these states and one of the conditions which it had to meet was full deposit insurance. If this condition had not been met, Landsbanki would never have obtained its licence to operate the Icesave accounts.
According to regulations in Britain and the Netherlands, incoming EEA banks should obtain deposit cover with a local Deposit Guarantee Scheme. If these banks have a home state cover, they may receive some unspecified discount off the full fee that they would otherwise pay. The amount of any discount is recoverable from the other members of the incoming EEA firm’s sub-class.
Therefore Landsbanki Islands HF did in fact have a double insurance cover for the EU minimum amount of EUR 20.887. When the bank collapsed, the deposit guarantee scheme FSCS in Britain and DNB in the Netherlands bought claims from all eligible holders of Icesave accounts, to the specified limits in these states. These claims were made priority claims by the emergency law set by Alþingi of Iceland. These claims are not the responsibility of the Icelandic people and not even the deposit guarantee scheme in Iceland.
Furthermore, I would like to draw attention to the double parts of the emergency law of 06th October 2008. One part dealt with establishment of new banks in order to secure the function of the economic system of Iceland. The other part of the emergency law made foreign holders of Icesave accounts into priority claimants. These were the only effects of the emergency law.
The governments of Britain and the Netherlands took advantage of the latter part of the emergency law by raising the level of deposit protection, in Britain from GBP 35.000 to GBP 50.000 and in the Netherlands from EUR 40.000 to EUR 100.000. Besides this doing the treasuries of these states paid the rest of the Icesave account claims, with the backing of the Icelandic emergency law.
Thus the fact is that claims from Britain and the Netherlands have priority rights and will collect substantial sums of money from the Landsbanki Islands estate. In all likelihood, the amounts paid to them will come to the equivalent of USD 7-9 billion, the first payment taking place within a few months. The Icesave dispute has so far centred on interest payments and the interpretation of the European Union’s regulations. Can we hope for a more balanced approach in the future ?
The thanks that Iceland received from these NATO allies and long standing friends, for granting their claims a priority status, was in form of the British anti-terror legislation against all Icelandic interests in Britain. Also Britain and the Netherlands engaged in outright economic warfare with Iceland, preventing the country access to foreign loans from such international organizations as the IMF and EIB. On top of that treatment came the totally illegal Icesave demands.
For having secured British and Dutch claims to the Landsbanki estate, Iceland thus received a special treatment, which will be long remembered. What do you need enemies for if you have such friends ?
Loftur Altice Þorsteinsson is a civil engineer and science teacher.

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