Iceland 'will compensate for losses'
Britain and The Netherlands to be compensated for losses suffered due to the country's failed Icesave online bank.
Last Modified: 15 Apr 2011 12:31
About 60 per cent of Icelandic voters rejected a deal to repay debts to Britain and The Netherlands [AFP]

Iceland has said it will start paying compensation to Britain and The Netherlands for losses suffered due to the country's failed Icesave online bank.

Johanna Sigurdardottir, Iceland's prime minister, said on Thursday the payments "will start this summer".

"These payments will largely give The Netherlands and Britain the means to cover the compensation given by the authorities to savers in their countries," she said in comments published in the Dutch De Volkskrant daily newspaper.

On Wednesday the government narrowly survived a no-confidence vote as the ruling coalition made up of the Social Democratic Alliance and the Left Green Movement held firm, winning by 32-30.

It was the first test for the government following a weekend referendum in which voters rejected a proposed deal to repay Britain and The Netherlands over $5bn for compensating their citizens who lost savings in the collapse of Icesave.

Last week Iceland's government said it has "no problem" repaying its debts as litigation loomed.

"Iceland's reserves are more than enough to cover all the payments in the coming years," Steingrimur Sigfusson, Iceland's finance minister, had said.

In Sunday's referendum nearly 60 per cent of Icelandic voters rejected a government- and parliament-backed plan to refund €3.9bn ($5.6bn) to Britain and The Netherlands for money they spent on compensating 340,000 of their citizens who lost money on Icesave.

Icesave went under at the height of the global financial crisis in 2008.

Topics in this article
Featured on Al Jazeera
Italy struggles to deal with growing flood of migrants willing to risk their lives to reach the nearest European shores.
Israel's Operation Protective Edge is the third major offensive on the Gaza Strip in six years.
Muslims and Arabs in the US say they face discrimination in many areas of life, 13 years after the 9/11 attacks.
At one UN site alone, approximately four children below the age of five are dying each day.
Afghan militias have accumulated a lengthy record of human-rights abuses, including murders and rapes.
Growing poverty is strengthening a trend among UK Muslims to fund charitable work closer to home.
A groundbreaking study from Johns Hopkins University shows that for big segments of the US population it is.
Critics claim a vaguely worded secrecy law gives the Japanese government sweeping powers.
A new book looks at Himalayan nation's decades of political change and difficult transition from monarchy to democracy.
join our mailing list