Icelandic authorities agree to pay back €3.8 billion
The Icelandic parliament has today passed a bill which will see over €3.8 billion repaid to UK and Netherlands savers who lost out in the Icelandic financial collapse. The vast majority of the money will go back to the UK and Netherlands government who have already been forced to compensate over 300,000 savers with money lost after the collapse.
This is the next stage in the economic recovery of Iceland although there has been some resistance to the €3.8 billion payout which is effectively costing each and every citizen in the country €12,000. However, the vast majority of his money was loaned to the Icelandic authorities by the UK government and the Netherlands authorities. It is also a major stumbling block preventing them from joining the EU, a move which will open up significant financial assistance from EU partners and the European Central bank.
While the collapse of the Icelandic financial sector and Icelandic banks is a distant memory for many people it does show that the credit crunch and the worldwide recession will leave a lasting impact around the globe. We have seen similar issues in Dubai where the authorities have taken on far too much debt and are now struggling to repay the outstanding balance. Could we see a similar collapse in 2010? Nobody really knows............
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