EFTA (European Free trade association) has ruled that Iceland was justified in refusing to compensate Britain after the then UK Labour Chancellor Alistair darling bailed out UK savers, who had opened high interest online deposit accounts, to the tune of £3.35 bln to maintain financial stability.
The Dutch did likewise.
The ruling by the EFTA, which has links with the European Union, does not mean the UK government will not be compensated for the expense. Iceland has so far used the liquidated assets of Landsbanki to pay out 90 per cent of what foreign governments are owed. This process will continue, the Icelandic foreign ministry said yesterday. But the ruling does establish the principle that national governments are not always responsible for the overseas liabilities of their banks that fail.
Full story here... Independent