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Netherlands: `No way now for Iceland to join EU`
Date 12/04/2011 16:22  Author webmaster  Hits 971  Language Global
12 APR 2011

By Leigh Phillips

EUOBSERVER / BRUSSELS - Mixed messages on the status of Iceland's EU accession application are coming from different actors in the bloc. But the Netherlands has said that after the country's second rejection by referendum of an agreement intended to resolve a bitter banking dispute between the Hague and the small island, there is now "no way" Iceland will be able to join the European Union.

"I think at this moment there is no way to get Iceland to join the EU. In that there is no option," Sylvester Eijffinger, Tilburg University economics professor and Dutch Prime Minister Mark Rutte's advisor on the Icesave banking conflict, told Morgunbladid, Iceland's main daily newspaper.

After the Icelandic Icesave internet bank collapsed in the wake of the global economic crisis in 2008, depositors in the UK and the Netherlands were compensated by their governments to the tune of €3.8 billion. The Hague and London then demanded Reykjavik pay them back.

On Saturday (10 April), 60 percent of Icelanders voted in a referendum against a deal that reduced the interest rate demanded by the Hague and London on the debt from 5.5 percent down to 3.2 percent. However, a majority of voters feel that even this was unfair, and do not want to see any public cash at all used to pay for the mistakes of the financial sector.

"Everyone is amazed. This is the second time that there has been a disturbance to the agreement because of the involvement of the president of Iceland and the referendum result. The last contract included a very generous offer by the British and Dutch authorities," Eijffinger added.

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