Iceland’s parliament voted today in favour of a new deal to repay $5bn (£3.1bn) to Britain and the Netherlands for debts incurred from the island’s banking crash.
The deal could pave the way for a final resolution to the dispute.
The bill now needs to be signed by President Olafur Grimsson, who a year ago shocked the country by calling for a referendum which resulted in rejection of an original plan, which parliament had approved.
Iceland owes the money to Britain and the Netherlands for bailing out savers who lost money in online ‘Icesave’ accounts run by one of the country’s banks, which collapsed in late 2008.
The actual cost to the state is expected to be much less than the $5bn owed as the government says most of the repayment will come from selling the assets of Landsbanki. It has estimated the cost at a maximum 50bn crowns ($425m).
A resolution of the Icesave dispute will remove one of the key areas of uncertainty surrounding the island’s economic recovery and help in talks on eventual European Union entry.
