Reinfeldt: ‘Iceland must honour its commitments’

Sweden's Prime Minister Fredrik Reinfeldt has reminded crisis-stricken Iceland that the Swedish portion of a large Nordic country loan is conditional on Reykjavik concluding a compensation deal for the Icesave bank collapse.

Reinfeldt: 'Iceland must honour its commitments'
Icelanders demonstrate in London, March 2009

“For us it has been important, and I think it will be for all parties, that (Iceland) does in fact honour its international commitments,” Reinfeldt told the TT news agency on Monday.

Iceland’s Nordic neighbours Denmark, Sweden, Finland and Norway agreed last year to €1.8 billion euros ($2.5 billion) in loans to the North Atlantic island nation to help it emerge from its deep economic crisis.

The loans were meant to bolster a promised $2.1 billion (€1.5 billion) bailout from the International Monetary Fund (IMF).

So far, Iceland has pocketed about one fifth of the Nordic loans and half of the IMF money, but the remaining payments have been delayed as Reykjavik attempts to reach a compensation deal with Britain and the Netherlands over the collapse of the online Icesave bank in October 2008.

In a referendum on Saturday, more than 93 percent of Icelandic voters rejected a deal to repay Britain and the Netherlands €3.9 billion ($5.3 billion) to compensate for money they paid to 340,000 of their citizens hit by Icesave.

Iceland’s left-wing government has expressed its commitment to negotiate a new, more advantageous deal soon.

Reinfeldt said he understood Icelanders’ frustration at being burdened with paying for the failures of a private bank and said the financial crisis had exposed weaknesses in the global financial system.

“We cannot have a situation where financial actors put any profits into their pockets while poor growth and large debts are sent to the taxpayers. And that is of course what went wrong on Iceland.”

Reinfeldt insisted nonetheless that “Iceland (must) honour its international commitments.”

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Why this Swede is now a legend in Iceland

Iceland may have been eliminated from Euro 2016 after a 5-2 defeat to France, but their departing Swedish coach will still go down as a legend in the country for his feats.

Why this Swede is now a legend in Iceland
Iceland's Swedish manager Lars Lagerbäck. Photo: Ciaran Fahey/AP/TT

Lars Lagerbäck's final act as Iceland manager was to mastermind an incredible run to the last eight at the Euros from the tournament’s least-fancied team. And midfielder Gylfi Sigurdsson says his boss will always be remembered for what he has done for Icelandic football.

“He is one of the guys that took us to France and the quarter-finals. He will be a legend in Icelandic football history,” the Swansea player told AFP.

“He helped us get to the finals and achieve some of our dreams, so it is very sad that he is leaving and I’m sure we’ll be in contact for the rest of our lives.”

Lagerbäck’s time with Iceland in France was his seventh major finals, having led his native Sweden to five and Nigeria at the 2010 World Cup. He believes the future for Iceland can be bright, even without his expertise.

“Hopefully the FA in Iceland and clubs can take this in, and perhaps use the income from this tournament and put it into a project to help develop young players, I think the future is pretty good,” the manager said.

“If you look upon the whole tournament, as a newcomer, to reach the quarter-finals has been absolutely fantastic.”

The big challenge for the island nation is to replace him. Lagerbäck will now hand over the reins to co-coach and part-time dentist Hemir Hallgrimsson.

“It’s been a fantastic journey these last four-and-a-half years. All the support I’ve got from everywhere I’ve been in Iceland and around the game has been absolutely fantastic,” the Swede said.

“It’s something really, really extra this tournament with all the fans coming here, and what he heard from back home and all the interest and positivity.”

Taking Iceland deep into the knockout stage of their first major finals has made Lagerbäck a coach in demand, with rumours of an offer from England even touted in the British press.

And while the Swede had previously suggested he may retire after Euro 2016, he now appears to be less certain.

“I’m not closing any doors. Right now I can’t think of a 100 percent coaching job, but if someone came with something interesting, of course I would listen,” he told Swedish broadcaster Viasat.