Iceland's President Olafur Ragnar Grimsson has held off from signing into law a compensation plan for mainly foreign savers in a failed Icelandic bank, according to reports Friday. The president met with cabinet members Thursday and said he wanted to hear concerns raised by critics of the plan, approved by the parliament on Wednesday by a 33-30 vote.
Almost 39,000 of the North Atlantic nation's 320,000 inhabitants have signed a petition against the Icesave compensation plan. Under the terms, Iceland is to repay 5.4 billion dollars in compensation to Britain and the Netherlands after the failure of the Icesave online bank that was part of Landsbanki, one of three main Icelandic banks that collapsed in the autumn of 2008.
The money, to be paid out in several instalments over the next 14 years, goes to the governments of Britain and the Netherlands, who partially compensated some 320,000 savers who lost their money when Icesave collapsed in 2008. The collapse of Iceland's banks plunged the country into recession, and the government was forced to seek emergency loans from the International Monetary Fund and its Nordic neighbours as well as Poland.
An initial deal on Icesave reached in August had to be revised as the British and Dutch governments opposed amendments to the plan. Fulfilling the Icesave compensation plan has been seen as necessary for Iceland to move ahead with its efforts to join the European Union. In July it handed in its application to join the 27-nation bloc.