Sigrún Davíðsdóttir's Icelog

In an interview with The Independent, Economic secretary to the Treasure Andrea Leadsom tells her version of how minister of finance Bjarni Benediktsson agreed to release money from Landsbanki estate. I had earlier written on what I had heard:

Regarding Landsbanki the delicate act is how to treat the main priority claimant, the UK deposit guarantee scheme. Economic Secretary to the Treasury Andrea Leadsom allegedly did not mince her words when talking to Benediktsson on his visit to London in autumn. He thought he was coming for a collegial meeting over drinks but instead got an almighty dressing down from the fearsome Leadsom. There are even rumours that the Secretary was waiving a legal writ already penned. All of this is rumours rumours and nothing more.

Now to The Independent:

(Leadsom) recounts the story of how, last autumn, she met Iceland’s Finance Minister, Bjarni Benediktsson, to persuade him to hurry up and pay back the couple of billion pounds that the UK spent on helping bail out one of the country’s banks.

“It was a friendly drink and chat. He was charming and agreed the money would be paid back,” she says. Then a couple of days later a well-known Icelandic blogger wrote that Bjarni Ben, as the dashing minister is known at home, had been looking forward to a “collegial meeting” with the economics secretary. Instead, the blogger reported, what he got “was an almighty dressing down from the fearsome Leadsom. There are even rumours that she was waving around a legal writ.”

A Leadsom handbagging, then? “No,” she laughs. “I was a little stern but I didn’t think I had been that hard. But he paid up and we’ve now recovered £1.36bn from the Landsbanki estate in Iceland, which operated as Icesave in the UK. We’re now in talks about getting the last £700m.”

This story now lives on in the minister’s new nickname; as The Independent adds “the minister now to known as Fearsome Leadsom”… And I now know that I am “a well-known Icelandic blogger”…

I recounted the story in my overview mid November of where the things stood with the capital controls. Not much has happened since, except for a meeting in December between the winding-up boards and their advisers with the government’s advisers, Icelandic and foreign.

The only concrete thing that the government has done, so far, towards lifting the controls is agreeing to the Landsbanki bonds agreement. As I understand, Landsbankinn, the new bank, and the Landsbanki estate had assumed they would get the government’s acceptance to their agreement in early May. That acceptance did not come until December 4. I assumed at the time that this showed Benediktsson now had an upper hand in his struggle in getting prime minister Sigmundur Davíð Gunnlaugsson to follow his line regarding the capital controls.

As is now clear, what really secured the end of the sorry Landsbanki bonds saga was not Benediktsson’s political clout or Gunnlaugsson’s understanding of the importance of passing the Landsbanki bonds agreement. No, it was a lady’s sternness, albeit a UK government minister, on the day of collegial drinks when fearsome Leadsom earned her name.

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