Iceland to repay £3.4bn to savers

Thursday 31st December 2009

The parliament in Iceland has today announced it has approved plans to repay £3.4 billion which was lost by savers in the UK and the Netherlands.

When the country's banking system collapsed, more than 320,000 savers lost out.

The money will be reimbursed to the British and Dutch governments who stepped in compensate savers when the online bank Icesave failed last year.

A bill to pass the measure was approved by a narrow margin, with 33 votes to 30. But the move was seen as crucial to help Iceland's bid to join the EU and rebuild its fragile economy. Opponents feared the country would not be able to afford the repayments.

"Approving the bill is the better option and will avoid even more economic damage," finance minister Steingrimur Sigfusson said. "History will show that we are doing the right thing."

The deal represents 40 per cent of Iceland's GDP. ADNFCR-1783-ID-19535068-ADNFCR

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