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Iceland 'to repay Icesave funds to UK and Netherlands' | Iceland 'to repay Icesave funds to UK and Netherlands' |
(40 minutes later) | |
Iceland has reached a deal to settle the Icesave banking dispute with the UK and Netherlands, the Dutch government has said. | |
Iceland will pay back the money the UK and Dutch governments spent reimbursing its citizens who lost money in the collapse of Icesave in 2008. | |
Repayments will begin in 2016 and will be completed by 2046, according to the Dutch finance ministry. | Repayments will begin in 2016 and will be completed by 2046, according to the Dutch finance ministry. |
Iceland will pay a fixed interest rate of 3% to the Dutch and 3.3% to the UK. | Iceland will pay a fixed interest rate of 3% to the Dutch and 3.3% to the UK. |
The Dutch statement said it would receive 1.3bn euros (£1.1bn; $1.7bn), but it did not specify the amount the UK would receive. | |
Representatives of the three countries met in London earlier to agree the final terms of a deal. | |
A spokesperson for the Icelandic finance ministry told the BBC that it would make a formal statement after Iceland's political representatives had been briefed on the agreement. | |
'New chapter' | |
The agreement also stated that repayments could not be more than 1.3% of the value of Iceland's annual economic output (GDP). | |
The repayments created a diplomatic row between Iceland and the UK, as well as political controversy in Icesave's home country. | |
The UK Treasury said it looked forward to finally resolving the issue. | |
"Mutually satisfactory closure of this issue will mark a new chapter in UK-Iceland relations," it said. | |
Iceland was plunged into a deep recession following the collapse of its leading banks. | |
Voters angry at having to pay for the failures of the country's financiers and politicians rejected the terms of an earlier Icesave repayment deal in a referendum in March this year. |