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Icesave talks to resume on Monday

Source: Reuters - Mon 15th Feb 2010

Iceland is set to resume talks Monday with Britain and the Netherlands on repaying more than $5 billion lost when Icelandic banks collapsed in 2008, Finance Minister Steingrimur Sigfusson said Sunday.

The British and Dutch governments have already compensated savers in their countries who invested in "Icesave" online high-interest savings accounts for their losses, and insist that Iceland must pay the money back.

A new negotiating team would leave Reykjavik to attend exploratory meetings Monday, Sigfusson told state radio, without saying whether the talks would take place in Britain or the Netherlands.

A previous round of talks ended in January with no signs of progress and was followed by sharp exchanges between Iceland and the Netherlands.

Iceland needs to agree terms for repaying the British and Dutch governments if it is to unblock financial aid vital for easing its economic crisis, and to avoid holding a national referendum on the issue on March 6.

Reykjavik plans to make a new proposal which a government source said involves quicker repayment of the debt with a sale of the assets of failed bank Landsbanki.

State radio reported that Monday's first meeting is meant to be an information exchange and will be a chance for Iceland to present the new proposal. No date for formal negotiations has been set.

Sigfusson has previously said the negotiating team would be led by U.S. attorney Lee Buchheit, with Canadian lawyer Donald Johnston - a former head of the Organisation for Economic Cooperation and Development (OECD) - also on participating in any new talks.

Iceland's parliament passed an Icesave bill setting out repayment terms in December, but the president refused to sign it, triggering the March 6 vote on the issue. Opinion polls indicate voters will reject that bill.

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