ICELAND’S PARLIAMENT yesterday approved a Bill to repay Britain and the Netherlands more than $5 billion (€3.49 billion) lost in Icelandic deposit accounts, a move seen as paving the way for further aid to repair the crisis-hit economy.

Prime minister Johanna Sigurdardottir hailed the Bill’s passage and voiced hopes the issue could be resolved after weeks of rancorous dispute and soul-searching across the island: “It’s obviously best for all three nations to reach an amicable agreement on this for it is in no one’s interest to see Iceland economically unable to meet its obligations.”

She described the Bill’s passage as “an important step in the overall economic recovery” and said talks held with the British and Dutch so far had given her a sense of optimism.

An Icelandic government statement said consultations would begin with the British and Dutch, adding that the prime minister was hopeful about a mutually satisfactory resolution.

Britain’s treasury gave a cautiously positive response, saying it supported Iceland’s commitment to repay its debt, but would carefully review conditions placed on the loan. The government had agreed a deal with Britain and the Netherlands in early June.

But Icelanders became enraged by the so-called “Icesave” Bill, fearful it could bankrupt the nation, and they were angry at having to pay the debts in the first place.

After weeks of political jockeying, amendments were added to the Bill setting a ceiling on the repayment based on the country’s gross domestic product.

“Personally, I’m relieved that it’s over,” said finance minister Steingrimur Sigfusson. “I don’t use the word ‘glad’ since there isn’t really anything to be happy about in this very tragic case for Iceland,” he said.

The government-sponsored Bill authorises repayment to the two countries over 15 years. – (Reuters)