EU nations ‘bullied Iceland’ into guaranteeing bank debt

ICELAND’S president accused European countries yesterday of having bullied it into agreeing to guarantee repayment of the debts of a failed bank, reviving a dispute with Britain and the Netherlands, whose citizens are owed billions.

When Iceland’s banking sector collapsed in the 2008 global financial crisis, accounts were frozen at the bank Landsbanki, which had accepted deposits from British and Dutch savers through online funds called Icesave.

Iceland says the estate of the failed bank will be enough to repay about $5 billion (€3.5bn) of debt to the British and the Dutch. The two countries had wanted the government in Reykjavik to give a state guarantee to the repayment.