October 18, 2009 / 5:16 PM / 10 years ago

Iceland says has new Icesave deal with Britain, Holland

REYKJAVIK, Oct 18 (Reuters) - Iceland’s government said on Sunday it had reached a new deal over reimbursing Britain and the Netherlands more than $5 billion in deposits lost when the island’s banks collapsed last year.

Iceland passed a law in August to repay money lost in high-interest “Icesave” accounts, but Britain and the Netherland’s balked at the terms, holding up aid from the International Monetary Fund and other lenders for the island’s stricken economy.

The government said it would put a new bill before parliament on Oct. 19.

“An understanding has been reached with the UK and the Netherlands,” the government said in a statement published on its website.

Prime Minister Johanna Sigurdardottir said at a press conference that the coalition government believed the new law would be adopted by parliament and a review by the IMF of its $10 billion bail out program would take place by the end of the month. (Reporting by Omar Valdimarsson, via Stockholm newsroom; editing by Maureen Bavdek)

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