In light of the acquittal in the Icesave case, I see a reason to post the press release from the Ministry for Foreign Affairs in its totality.
The interesting question which now remains is: are deposits in Europe safe? If e.g. Santander goes bankrupt, will the savers in the UK, which have deposited their savings at the Santander branches in the UK, be repaid? (Amongst other things, it depends on whether the Santander operations in the UK are under the umbrella of a branch or a subsidiary of Santander Spain. It also depends on whether the bank is a member of the UK deposit insurance scheme or not). Likewise, will a German customer of Bankia be repaid if the bank goes bankrupt? Who is meant to save Bankia in case of the need of a bailout: the German government? The Spanish one? Both?
Please, do note that I am not with those words questioning the security of UK deposits in Santender UK or German deposits in Bankia. I am merely trying to explain that the deposit insurance schemes in Europe are far from being fully funded and, in light of the acquittal, NOT automatically backed up by the States' finances.
Surely, the plans on creating a pan-European banking regulator will take this acquittal into the account when its formation will be decided.
Here is the press release (italics are mine):
Iceland welcomes acquittal in Icesave case
The EFTA Court ruling on Icesave rejected all claims by the EFTA
Surveillance Authority that Iceland should be declared in breach of the EEA
Agreement. The Court rejected the claim that Iceland has breached the Deposit
Guarantee Directive or has discriminated against depositors contrary to EEA
law. It is a considerable satisfaction that Iceland´s defence has won the day
in the Icesave case; the EFTA Court ruling brings to a close an important stage
in a long saga.
Iceland has from the start maintained that there is legal uncertainty as to
whether a state is responsible for ensuring payments of minimum guarantees to
depositors using its own funds and has stressed the importance of having this
issue clarified in court. There was, however, no realistic possibility of such
clarification until the EFTA Surveillance Authority decided to refer the case
to the EFTA Court.
This judgement concludes the procedures with the EFTA Surveillance Authority
in regard to the Icesave case. The ruling of the EFTA Court is final and cannot
be appealed. This case has been particularly difficult to handle both
nationally and internationally, and has occasioned, among other things,
considerable delays in the implementation of the Government´s economic
programme. Icesave is now no longer a stumbling block to Iceland economic
It is important to bear in mind that payments from the estate of the failed
Landsbanki will continue regardless of the ruling of the EFTA Court. The assets
of the estate are now estimated to be 1,517 billion ISK which is approximately
200 billion ISK more than the priority claims which amount to 1,318 billion
ISK. Of these priority claims 1,166 billion ISK result from the Icesave deposits
while just under 150 billion ISK result from wholesale deposits, including
those from municipalities, charities etc. The sum of 660 billion ISK has
already been paid out of the estate against priority claims, i.e. around 50% of
their total value. Of this 585 billion ISK have gone to claims resulting from
the Icesave accounts. This sum amounts to over 90% of the total which the UK
and Dutch authorities advanced to cover the minimum deposit guarantee.
It is expected that the Icesave claims will be paid out in full by the
actual debtor, the estate of the failed Landsbanki. This outcome results from
the implementation of emergency legislation in 2008, according to which
deposits were given priority against unsecured claims.