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UK/Icesave talks collapse

Talks between the UK and Iceland over the repayment of lost depositors’ money have collapsed.

Iceland has rejected an offer from the British and Dutch governments yesterday to soften the repayment terms of the £3.4bn lost in the failed bank Icesave.

Reports say that both parties offered  a two-year interest holiday on the repayments and a reduced interest rate of 2.75 per  cent above Libor.

The Icelandic ministry of finance said that the latest round of talks with the Netherlands and the  UK regarding the Icesave matter have adjourned without a final resolution.

Iceland minister of finance Steingrímur J Sigfússon says: “We had hoped to be able to reach a consensual resolution of this issue on improved terms but this has not as yet been possible. Constructive proposals were made by both sides during these talks, but significant differences remain. We will now consult with our negociating team once they are back in Iceland.”

The breakdown follows two weeks of intense talks between representatives of the three governments.

A referendum is due on March 6 whereby Icelandic voters will vote  on whether to approve the terms of the Icesave deal negotiated with the British and Dutch governments last summer.

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