In the soup: a political row has held up payments to Icesave customers. Pictured is the Blue Lagoon outside Reykjavik, Iceland's capital Photo: AFPPolitical row over compensation for Britain's Icesave customers.
The International Monetary Fund has delayed handing over the second tranche of Iceland's emergency bail-out loan.
It is thought to be linked to the political row over compensation for Britain's Icesave customers, as opposition grows in Iceland to the terms of a loan from Britain to help the country cover the liability.
Iceland had to turn to the IMF for bail-out last October, when its three biggest banks, Kaupthing, Landsbanki and Glitnir failed.
A diplomatic dispute between Iceland and Britain ensued over compensation for UK customers of Icesave, Landsbanki's internet bank.
Earlier this year, Britain agreed to compensate 300,000 UK savers with Landsbanki's Icesave, lending Iceland £2.1bn to cover the first €22,000 (£18,800) in each account.
However, over the last month, it has appeared increasingly unlikely that Iceland's politicians will accept punitive interest rates of 5.5pc attached to the British and Dutch loans.
Polls in Reykjavik show that a parliamentary bill needed to approve the loan does not have the support needed to be passed.
It is possible that a failure to pass the bill could topple a second Icelandic government in less than six months.
A vote on the bill is not expected at least until the assembly reconvenes next week.
Posts
0 comments:
Post a Comment