Sigrún Davíðsdóttir's Icelog

Althingi passes the Icesave bill

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Two and a half years after Icelanders discovered that the clever thing about the Landsbanki Icesave deposits was that it was guaranteed by the Icelandic tax payers, Althingi has passed the Icesave guarantee. That removes a hurdle in settling the Icesave guarantee with the UK and the Netherlands. The vote was convincing: 40 MPs out of 63 voted in favour.

Although courage hasn’t been his most striking characteristic Bjarni Benediktsson the leader of the Independence Party showed the courage to come forward in favour of the Icesave agreement. Icesave III, the third agreement, was negotiated by a team led by Lee Buchheit who consequently won such popularity in Iceland that one of the newspapers voted him the man of the year 2010.

Benediktsson hasn’t won much praise in his party for his support of the Icesave agreement but a lot of anger and resentment. Some had predicted that the party might split on the issue but the question is if this issue is really worth it. Remains to be seen. But it’s almost certain that Morgunbladid, edited by David Oddsson – ex PM, ex IP leader, ex governor of the Icelandic Central bank and strongly against paying the Icesave guarantee – will spare nothing in venting its anger at Benediktsson. Oddsson doesn’t like to lose and is known for his vicious wit. Some of it might easily spill out into Morgunbladid in the coming days. Oddsson is also known for picking up the phone when he’s upset. It’s quite plausible that Benediktsson will get a call or two from the ex leader.

Around Christmas, an opposition MP, not from the IP, told me that according to the political rumour mill the IP would come out in favour of Icesave in return for the government going easy on any changes regarding the fishing quotas. Iceland has had transferable fishing quotas since the late ’80s. Ever since, the quota allotment has been a bone of contention in Icelandic politics. The system was originally designed by the IP. The present government, led by social democrats with the Left Green, has vowed to change the system, to make it, as the government says, more fair. The quota system will soon be on the agenda. It’s too soon to say if my source could possibly be right.

It’s also still too early to say if the passing of the Icesave guarantee by Althingi was the last hurdle in settling Icesave. President Olafur Ragnar Grimsson has yet to sign the bill. He didn’t do it last year, when Althingi passed an Iceave bill (on much harsher terms than the present agreement) but with a clear and convincing majority this time and with no one except some members of the IP up in arms about it it’s likely that this time the president will sign the agreement. However, it’s never been easy to gauge the president’s move so we better wait and see.

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Written by Sigrún Davídsdóttir

February 3rd, 2011 at 5:34 pm

Posted in Iceland

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