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Evropeos- 05-29-2009
Iceland's government asks parliament to vote on EU membership

28 May 2009, 16:07 CET

(REYKJAVIK) - Iceland's Foreign Minister Ossur Skarphedinsson introduced a motion in parliament Thursday asking lawmakers to vote on whether the country should apply for EU membership.

Skarphedinsson told members of Iceland's parliament, the Althingi, that "the Icelandic nation stands at a crossroads" and urged members to back his proposals, adding it was "timely and necessary for the country".

But he stressed that the final say would ultimately lie with the people if and when successful negotiations have been concluded with Brussels.

"The nation will have the last word when the possible agreement with the EU is put before a national vote," said Skarphedinsson, a member of the pro-EU Social Democrat party.

Support for EU negotiations soared after Iceland's once-booming financial sector crumbled in October, pushing thousands of the country's 320,000 inhabitants out of their jobs as their savings evaporated.

Skarphedinsson told lawmakers that EU membership would have stablising effect on the economy.

"Membership and adoption of the euro will assist in bringing foreign investment into the society," he added.

Lawmakers opened the debate on the motion Thursday and the final vote is expected to be held in late June or early July, aides close to Prime Minister Johanna Sigurdardottir told AFP.

By giving voters the final say on forging closer ties with the European Union, Iceland's left-wing coalition government is acknowledging the deep divisions on the issue within its own ranks.

Sigurdardottir's Social Democrats campaigned on a promise to apply for membership, while junior coalition partners the Left Green Movement oppose joining.

The coalition scored a historic election victory on April 25, becoming the majority in parliament for the first time as the Social Democrats and the Greens won a combined total of 34 of the 63 seats.

The conservative Independence Party, which had faced street protests over its handling of the economy, was ousted after 18 years in power.

The Social Democrats -- who hold 20 seats while the eurosceptic Greens have 14 -- could get two other pro-European parties, the Citizen Movement and the Progressive Party, to back their resolution, observers say.

A recent Capacent Gallup poll by RUV radio suggested that 61 percent of Icelanders were in favour of opening EU accession talks while nearly 27 percent were against it.

Close to 1,300 people were questioned in the survey between April 29 and May 6 with just over 60 percent replying.

Iceland's annual unemployment rate rose to 9.1 percent in April from 8.9 percent in March. The jobless rate was under two percent last October.

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Evropeos- 07-16-2009
Iceland's parliament backs applying for EU membership

16 July 2009, 18:02 CET

(REYKJAVIK) - Iceland's parliament voted in favour of applying for EU membership on Thursday in the wake of its economic meltdown, opening the way for negotiations to begin with the 27-nation bloc.

A total of 33 members of the 63-seat Althingi backed the governing Social Democrat party's proposition to open membership talks with Brussels, while 28 voted against and two abstained.

Five members of the Left Green party, the Social Democrats' partner in the coalition government, rejected the proposition, including Jon Bjarnason, the minister of agriculture and fisheries.

The pro-EU Social Democrats, who hold 20 seats, and the 14-strong Left Greens formed a coalition government at the end of April following a general election.

Swedish Prime Minister Fredrik Reinfeldt, whose country currently holds the EU presidency, welcomed the news.

"I welcome that the Icelandic parliament has now decided for itself to apply for EU membership," Reinfeldt said in a statement.

"The application is going to be handled according to the (European) Council's established procedures," he added.

Under those procedures, Iceland will make its application to the Swedish EU presidency, which in turn will ask fellow EU members if there are any objections to the North Atlantic island joining.

If there is no opposition, the European Council will ask the European Commission to report on whether Iceland should be given candidate status.

Once the commission's report has been completed, membership negotiations can start.

But it is the voters who will have the last word on whether the Icelandic government can join the 27-nation bloc.

If Iceland is successful in its negotiations with the European Union, the question will then be put to the Icelandic people in a referendum.

Iceland's Prime Minister and Social Democrat leader Johanna Sigurdardottir was a strong advocate of closer ties with the EU and adopting the euro on the election campaign trial earlier this year.

The government argues joining the European Union would be beneficial for Iceland, claiming it would stabilise the economy following the collapse of its once-booming financial sector in October.

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Evropeos- 08-28-2009
user posted image
The governments will be reimbursed over 15 years


Iceland to pay back Icesave cash

Page last updated at 17:06 GMT, Friday, 28 August 2009 18:06 UK

The Icelandic parliament has voted in favour of repaying more than $5bn (£3bn) to the governments of the UK and the Netherlands.

The so-called Icesave bill will reimburse funds paid by the governments to compensate those who lost money in the Icelandic online bank Icesave.

About 400,000 savers lost their money when its owner Landsbanki collapsed last year.

The bill has enraged many in Iceland, who fear it might bankrupt the nation.

The deal was agreed in June, but was only passed after an amendment was added setting various limits to the payments.

'Fairness'

The Icesave bill's passage means that the Icelandic government has agreed to guarantee the repayment of the £2.3bn loan the UK government made last year to ensure that none of its savers lost money.

The amendments will now have to be agreed by the UK and the Netherlands.

"It is my sincere hope after this vote, that the UK and Holland will show us understanding and fairness in this matter," Iceland's Prime Minister Johanna Sigurdardottir said after the vote in parliament.

The amount that will be paid is limited based on the level of Iceland's economic output, or gross domestic product (GDP).

The country will have to pay up to 4% of its GDP each year to the UK and 2% to the Netherlands.

No payments will be made for the next seven years, but the bill says that if the full payments have not been made by 2024 then no further payments will be made. Effectively, there is only an eight year window for the loans to be repaid.

Controversial bill

The amendments to the bill were added by MPs to try to soften the impact of the legislation.

Some members of parliament have questioned why the government should be repaying the debts of a private bank.

In the vote, 34 members voted in favour, 14 voted against and there were 14 abstentions.

There is particular anger at the UK for using anti-terror laws to freeze Icelandic banking assets in the UK when the crisis began last year.

Chancellor Alistair Darling was also accused of undermining confidence in the Icelandic banks.

Iceland eventually had to take over its three biggest banks - Glitnir, Kaupthing and Landsbanki, which owned Icesave.

Loan guaranteed

In a statement, the UK Treasury said, "As you would expect, the UK will look carefully at any conditions placed upon the loan to ensure that they are reasonable".

Iceland hopes that the agreement to make payments to the UK and the Netherlands will help it to get more financial aid.

It does not cover the money councils invested in Icelandic banks. They are engaged in a separate process to recover their money, led by the Local Government Association.

As part of that process Nottingham City Council, which lost £42m, received a first payment on Friday of £2.5m.

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Evropeos- 10-19-2009
user posted image
The governments will be reimbursed over 15 years


Iceland reaches savers' agreement

Page last updated at 19:42 GMT, Sunday, 18 October 2009 20:42 UK

The Icelandic government says it has come to a new agreement with the governments of the Netherlands and the UK over the repaying of $5bn (£3bn).

A law to reimburse funds paid out by the two governments to those who lost money when online bank Icesave's owner collapsed in 2008 was passed in August.

The UK and Netherlands disagreed with the terms, meaning a new bill will go before Iceland's parliament on Monday.

About 400,000 savers lost money when Icesave owner Landsbanki collapsed.

The Icelandic government said in a statement published on its website: "An understanding has been reached with the UK and the Netherlands."

Anti-terror laws

Iceland's Prime Minister Johanna Sigurdardottir said the government believed the new law would be adopted by parliament.

At a press conference, she said a review by the IMF of its $10bn bail-out programme would take place before the end of the month.

There has been particular anger that the UK used anti-terror laws to freeze Icelandic banking assets in the UK when the crisis began last year.

UK Chancellor Alistair Darling was also accused of undermining confidence in the Icelandic banks.

Iceland eventually had to take over its three biggest banks - Glitnir, Kaupthing and Landsbanki.

Iceland hopes that the agreement to make payments to the UK and the Netherlands will help it to get more financial aid.

It does not cover the money British councils invested in Icelandic banks.

They are engaged in a separate process to recover their money, led by the UK's Local Government Association.

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