Iceland finance minister presents new Icesave bill to parliament

REYKJAVIK (Reuters) - Iceland’s finance minister presented a bill to parliament on Thursday outlining a revised repayment plan to Britain and the Netherlands for Icesave debts incurred when its banking system collapsed two years ago.

Steingrimur Sigfusson urged parliamentarians to settle once and for all the long-running dispute by throwing their weight behind a bill which negotiators say offers the country better terms than a previous one rejected in a March referendum.

“The country needs to close this chapter in a way that will be beneficial to all,” Sigfusson said in a speech in parliament.

Icelandic negotiators, forced back to the drawing board by the popular “No” vote, said last week they had secured a new draft deal with the British and Dutch which bailed out savers in accounts run by failed bank Landsbanki.

Sigfusson said it would be best to be “realistic and moderately optimistic” about the bill. He said the issue would be passed to the budget committee before a debate continues when parliament resumes in mid-January.

The draft deal has an estimated cost to Iceland of around 47 billion crowns (£258.7 million). The bulk of the repayment is expected to come from assets recovered from the collapsed bank.

Iceland’s negotiators and the winding-up committee of the Landsbanki estate estimate they will recover at least 86 percent of the total $5.2 billion debt, the finance minister said.

Opposition leaders acknowledged the new deal was much better than the one turned down in the referendum, but urged the Left Green-Social Democratic government to accept it had been wrong to support what they called an inferior previous deal.

“The progress made, as evident in the new agreement before us, is solely to the credit of the people of Iceland who cast their votes in the referendum,” said Independence Party leader Bjarni Benediktsson.

“The finance minister needs to accept that the referendum was not a waste of time but necessary to bring this issue to a new and more fortuitous level.”

Reporting by Omar Valdimarsson; Editing by Catherine Evans