Questions for the ECB ahead of the Icelandic Icesave Referendum

A copy of the following letter has been sent by a small Icelandic group campaigning in advance of theforthcoming referendum on the terms of the Icesave deal with Britain and the Netherlands to several officials within the EU and EFTA as well as to the ministeries of Britain, Holland and Iceland to whom this case belongs. The letter has also been sent to several European newsmedia.

Reykjavik 18.03.2011

Mr Herman Van Rompuy
President of the European Council
European Council
Rue de la Loi 175
B-1048 Brussels

Dear Mr Van Rompuy

The Icelandic banks (90%) collapsed in autumn 2008 and with the banks Landbanki’s subsidiaries in London and Amsterdam (the Icesave deposits). According to the principal rule of the European Economic Area Treaty, the concept of market equality is the basis of co-operation within the European Community as stated in the Agreement on the EEA Part I: Objectives and principles, article 2, item e:

“the setting up of a system ensuring that competition is not distorted and that the rules thereon are equally respected…”. (Highlighted by signatories) It is clearly stated that the principal rule of the EEU co-operation is to prevent distortion of competition”.

In this light, British and Dutch authorities were obliged to ensure that Landsbanki branches in London and Amsterdam had satisfactory securities from The Depositors’ and Investors’ Guarantee Funds within their own borders. If that were not the case, it would have been marketing distortion.

Britain and Netherlands unilaterally decided to make the Icesave deposits a political issue instead of a legal one. On that basis, they have demanded that Icelandic taxpayers pay the Icesave deposits which under EU regulations should have been covered by British and Dutch Depositors’ and Investors’ Guarantee Funds, as is clearly stated in European Economic Area treaty.

The first reaction of the Icelandic government was that Iceland was being bullied and the Icesave dispute should be resolved in courts. Britain and Netherlands refused but prior to that the British government had taken the unprecedented action to use anti-terrorism legislation against Iceland and Landsbanki. As a consequence, Kaupthing bank operations (Singer & Friedlander) in Britain were closed down and with it fell Iceland’s biggest bank.

Due to these harsh actions taken by British and Dutch governments all flow of capital to and from Iceland was stopped. Iceland state finances were taken hostage by a foreign power. As a consequence, Iceland was forced to negotiate the Icesave deposits if the country was to get assistance from the International Monetary Fund. The IMF demanded that Iceland negotiated the Icesave deposits due to pressure from Britain, Holland and European Union countries.

The current Icesave agreement can cost Iceland up to half of its state budget. If the Emergency law of October 2008 will not stand up in court of laws, the Icesave deposits will amount to double state budget. The people of Iceland have found it hard to accept being forced to pay for actions made by reckless and irresponsible bankers: burdens which according to EEA-regulations actually belong to British and Dutch Depositors’ and Investors’ Guarantee Funds as applied to fair and equal competition within the European Economic Area.

The Icelandic nation will vote in a referendum on the latest Icesave-agreement on the 9th of April 2011. We refused to accept the last one in a referendum. We therefore feel compelled to get answers to the following questions before the referendum.

  1. What is the moral value of an agreement between three parties (latest Icesave-agreement) where two parties (Britain and Holland) force the third party (Iceland) to the negotiation table when the matter should be on the table of The Depositors’ and Investors’ Guarantee Funds in Britain and Holland?
  2. Why has Iceland not been able to defend itself in courts of law against British and Dutch claims?
  3. In the light that Landsbanki had to apply to British law, why was the bank allowed to open saving accounts before it had made the necessary arrangements with the Depositors’ and Investors’ Guarantee Funds?
  4. Did it not distort competition as Landsbanki was not obliged to make arrangements with the Guarantee Funds in Britain and Holland?
  5. Was the interest of British and Dutch consumers not looked after, as Landsbanki did not have to pay to the Guarantee Funds like its competitors?
  6. Is the European Union going to let Britain and Holland violate the principals of the EEA-treaty on equality of competition?
  7. Is it in accordance with EU policy to let the taxpayers bear the burden when privatanks go bankrupt?
  8. Are Depositors’ and Investors’ Guarantee Funds of any country within the European Union strong enough to guarantee deposits in the case of (90%) banking collapse?
  9. What will be the reaction of the European Union if the people of Iceland reject the latest Icesave agreement on the 9th of April 2011?

Sincerely and with requests for good answers


Ásta Hafberg, student business management
Baldvin Björgvinsson, certified electrician, teacher
Björn Þorri Viktorsson, supreme court attorney
Elinborg K. Kristjánsdóttir, journalist, student
Elías Pétursson, CEO
Guðbjörn Jónsson, retired consultant
Guðmundur Ásgeirsson, software developer
Gunnar Skúli Ármannsson, cand med
Haraldur Baldursson, technologist
Helga Garðasdóttir, student
Helga Þórðardóttir, teacher
Inga Björk Harðardóttir, teacher, artist
Karólína Einarsdóttir, biologist and teacher
Kristbjörg Þórisdóttir, cand. psych.