EFTA Court to hear cases against Iceland on Icesave

The European Free Trade Association [EFTA] court is to hear the case against Iceland in respect of two cases relating to the failure of the Icelandic bank, Landsbanki during the 2008 crisis in the collapse of so many financial institutions.

At issue is the default on foreign customer deposits by Landsbanki branches in the UK and in the Netherlands – in what were high interest Icesave accounts.

The cases have been brought to the EFTA court by the EFTA surveillance Authority and will be heard on 28th January 2013.

  • Iceland is accused of violating the EU directive in not having repaid the €20,000 insurance for each deposit at Landsbanki’s foreign branches.
  • Iceland is accused of discriminating against depositors by fully guaranteeing deposits in banks in Iceland – but not in their foreign branches.

The public sitting for the delivery of the judgment in will be held on Monday 28th January 2013 at 11:30.

The EFTA Surveillance Authority is asking the EFTA Court, in regard to these two cases, to:

‘Declare that by failing to ensure payment of the minimum amount of compensation to Icesave depositors in the Netherlands and in the United Kingdom provided for in Article 7(1) of the Act referred to at point 19a of Annex IX to the Agreement on the European Economic Area (Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes) within the time limits laid down in Article 10 of the Act, Iceland has failed to comply with the obligations resulting from that Act, in particular its Articles 3, 4, 7 and 10, and/or Article 4 of the Agreement on the European Economic Area.’

It is also asking the EFTA Court to require Iceland to bear the costs.

Given the catastrophic impact that the collapse of its banks had on the economy of Iceland – with wholesale job losses and heavy emigration for work, its recovery has been utterly remarkable.

The country is now repaying depositors and has made substantial inroads into demolishing that debt.

It is also working to rebuild its economy, with significant movement in oil exploration.

It issued exploration and production licences this morning [4th January 2013] for the Dragon area.

he Icelandic branch of Faaroe Patroleum Norge AS and Islenskt Kolvetni ehf, with Valiant Production ehf and the Norwegian state-owned Petoro, were granted licences – Petoro with the approval of the  Norwegian government.

Norway is a fellow member of EFTA.

Iceland is also driving up its tourism industry, creating more experiences to draw people to visit the country. It is now going ahead in building the largest man made ice-tunnel in the world – at the Langjokull Glacier. It will be three hundred meters long and will be open to the public.

Iceland is not out of trees yet, so to speak,  but it is well on its way and commands both admiration and respect for the way it is has strategically set about its recovery.

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