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REYKJAVIK : Iceland made significant progress Saturday in resolving a clash with Britain over funds frozen in the online bank Icesave, while reaching a deal with the Netherlands to reimburse Dutch depositors.
Icelandic and British officials "met in a friendly atmosphere in Reykjavik to discuss issues of mutual interest related to the current financial crisis, with the objective to reach a mutually satisfactory solution on the issues concerned," a joint statement said.
"Significant progress was made on retail depositors of Icesave with arrangements agreed in principle for an accelerated payout to depositors," it said, adding that the delegations would work on the remaining issues over the coming days.
Some 300,000 private British savers reportedly have over four billion pounds (6.8 billion dollars, 5.0 billion euros) locked in Icesave, an online British subsidiary of Iceland's nationalised Landsbanki.
The Netherlands meanwhile has reached an agreement with Iceland to rescue the more than 120,000 Dutch clients with some 1.6 billion euros in savings in the collapsed Icesave bank.
"The agreement states that the Icelandic government will compensate each Dutch depositor up to a maximum of 20,887 euros (28,240 dollars)," a joint statement said.
"The Dutch government will provide a loan to Iceland to enable this restitution and the Dutch Central Bank is to settle the depositors' claims," it said.
The Netherlands had announced earlier this week that it would guarantee savings up to 100,000 euros by Dutch clients of Icesave.
The global financial crisis has devastated Iceland's banking sector, forcing the country to nationalise its three biggest lenders.
Landsbanki, the country's second biggest bank, was taken over by Icelandic authorities on Tuesday.
The bank has announced that customers can no longer withdraw or deposit money, prompting the British government to threaten legal action to recover money lost.
London froze the assets of Landsbanki using anti-terrorism legislation on Wednesday, triggering a protest by Iceland which is struggling to cope with the near-collapse of its entire banking system.
British Prime Minister Gordon Brown Friday toned down the rhetoric, telling his Icelandic counterpart he hoped that the two nations could resolve their clash over frozen savings as soon as possible.
"We very much hope that it will be possible to resolve this situation rapidly and on a constructive and cooperative basis," Brown wrote to Geir Haarde as senior British officials arrived for talks in Reykjavik.
- AFP /ls
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