Iceland UK relations thawing?

Discussions between the Icelandic and British authorities on the current banking crisis are being described as “positive”, ITV News reported last night.

Scottish Secretary Jim Murphy is in Reykjavik and became the first UK cabinet minister to speak face-to-face with the Icelandic Prime Minister since the banking crisis broke early in October.

Mr Murphy said: “This has been a positive visit. Mr Haarde and his government have been hospitable and helpful and we are all agreed that it is important to find a constructive and co-operative way forward that allows the technical experts to work on the detail of recovering UK savers’ money.”

British deposits are estimated at a total of around GBP 4 billion in Icelandic banks.

According to Mr. Murphy, both countries share the ultimate goal of achieving a stable banking sector, in Iceland, all of Europe, and further afield.

He said: “The UK Government’s primary objective remains to secure the investments of the 300,000 depositors, plus many local authorities, held in the failed Icelandic banks.”

Jim Murphy publishes a blog on the Scottish Office website. Here is today’s entry in its entirity:

“I arrived in a windswept Reykjavik in an Iceland battered by an economic storm. The banking system here has literally collapsed, and politics here is currently highly charged but a lot less formal. I started by meeting the Prime Minister and we discussed the things we need to do together to allow the technical experts to work on the detail of recovering UK savers’ and investors’ money. Ultimately we share the same aim, which is to restore the stability of the banking sector, not only in Iceland but across Europe and beyond.

“I also met acting foreign secretary Ossur Skarphedinsson, with whom I talked over a lot of issues including Icelandair flights to Glasgow. He is acting foreign secretary as Mrs Gisladottir is unwell. I hope she makes a full and quick recovery, as while I was still the minister at the Foreign Office I signed a military cooperation agreement between our two countries and thoroughly enjoyed working with her.

“Later I caught up with all of the British embassy staff, before the day finished with a visit to a more barren part of the country to visit a geothermal power plant. This plant uses the water heated by the small earthquakes as the plates below the surface collide and generates enormous heat. The water and steam is used to generate energy for over 100,000 people (I’m not a scientist so I hope I have got the basics of this right). All in all this was a fascinating and productive day, which was topped off with a brief meeting with the Norwegian foreign minister who was also in town. It was also good that wherever I went everyone said how much they enjoyed the visit of the tartan army when they were here earlier in the year. We look forward to returning the hospitality – and repeating the result – next year.”

icenews.com