Skýrslan á heimasíðu Elviru

Elvira Mendez Pinedo hefur sett skýrslu sína um Icesave með tilliti til Evrópuréttar á heimasíðu sína.

Skýrslan er nokkuð mikil að vöxtum og málið flókið, en niðurstöður Elviru eru sem hér segir:

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From a European law perspective the dispute and settlement of Ice-save dispute is highly complex and it presents difficult choices derived from diverse legal, economic and political factors.

1. The State liability of Iceland resulting from the Deposit Guarantee Fund (Tryggingasjóður) not having sufficient funds to cover all depositors is very unclear and EU law does not provide yet a definite answer. It has to be noted that it is a private fund that must respond in the framework of the DGS. The role of the State as a guarantee of last resort is not stated in the Directive. It can be argued that Iceland has complied with its duty of implementation of the EU provisions. No EU institution, no EU Member State ever considered necessary to legislate on the cases of systemic failure. For reasons of competition and state aid, EU States cannot guarantee their private banking institutions. In view of the above, the issue of liability/indemnity of the State is very much unclear.

2. From a strictly legal point of view, it is incomprehensible that this dispute is not taken before a European court as too many uncertainties have to be clarified. The European Court of Justice or the EFTA Court should rule on the interpretation of Directive 94/19/EC and the liability/immunity from the State in case of systemic failure. EU legislation keeps silence on the issue so it is questionable whether the general conditions for State liability in EC/EEA law apply. The case Peter Paul and others from the ECJ in 2004 and, in particular, the arguments that several Governments pleaded during the proceedings as well as the opinion of the Advocate General are essential in this regard. . The EEA Joint Committee could also be charged of finding a political solution at European level.

3. The doctrine and the European institutions knew that the EU legislation would not be enough to cover a case of systemic bank failure. They also knew that the risks inherent to the cross-border application of the rules were not protected well enough and that the financial supervision was decentralized. It seems to be an accepted fact that Iceland failed in the supervision of Icesave branches of Landsbanki as a home state but questions arise whether the UK and Holland have also failed as guest states.

4. However, since Iceland created new banking entities bringing as assets all deposits in Iceland without any limit, the question arises whether Iceland was obliged to cover other depositors in the EU who were not connected to the territory. The principle of non-discrimination is essential in EU/EEA law and it is very difficult to derogate from it. Although the maximum liability under the Directive is 20.889€ according to the ECJ (case Peter Paul), depositors in the UK and Holland could also claim the whole amounts under the principle of equality and non-discrimination before national/European courts. It is very unclear what would be a judgment in that case under European/national laws.

5. If the EU has no competence on the issue the principle of discrimination does not come into play. It is important to remember that nothing in the new Treaty of the European Union nor in secondary law provides for a role or the competence of the EU to deal with national measures designed to nationalise, bail-out or restructure domestic banks in emergency situations such as the recent financial crisis requested. It could be therefore very well argued in European law that the nationalisation of private debt in emergency circumstances created by the collapse of practically the whole banking system of Iceland falls outside the scope of EU and, by extension, EEA law.

6. The Ice dispute has dramatically unveiled a grey area of EU law. There was no EU safety net and a fragmented European legal order unfit to cope with a case of cross-border insolvency/bankruptcy and the subsequent reorganisation/nationalisation of debts. While we all recognise that it is very regrettable, the fact is that EU law did not provide a legal framework to manage/stop the Icelandic crisis.

7. It could also be argued that the solution of problems derived from the internal market is the main competence and the main responsibility of the European Union. If this is so, consistency is required. In this case, the EU institutions cannot pretend that this dispute has to be solved on a bilateral basis. If EU/EEA law has created the problem (lack of harmonisation on the essential question of liability/immunity of the State in case of systemic failure), the EU/EEA institutions must be there to solve it. Otherwise they are failing to their duties and obligations under the EU/EEA Treaties and the whole internal market becomes a fallacy for citizens, economic operators and States.

8. In all circumstances, the legal dispute should not be limited to discuss the normative provisions of Directive 94/19/EC in isolation. The whole EU and EEA legal orders must be taken into account for the resolution of this problem In this regard the main question is whether the gigantic debt that Iceland would have to borrow will affect the whole economic life for the next 15 years threatening the economic stability of the country. Is this fair for an EEA member and European partner in the lights of the principles of the European legal order?

9. The Icesave agreements signed by Iceland with the UK and Holland for the repayment of the dept are international business law contracts strongly biased towards the lenders which reflect a fundamental mistrust against Iceland: its legislative, executive and judicial powers. From a EU/EEA law point of view they could be strongly discussed. The current Icesave agreements do not allow Iceland to take this dispute before the ECJ under EU/EEA law and deprive Iceland and Icelanders of access to justice. We refer to the Report done by the UK legal firm Mischon de Reya in December 2009.

10. At a political level, European Commissioner Joaquín Almunia has confirmed that the EU will not give financial assistance to Iceland until the International Monetary Fund has signed an agreement with the Icelandic Government. The IMF is not going to approve the agreement unless Iceland approves by national referendum the current Icesave agreements which are strongly criticised by an important part of the population. Iceland seems to be trapped in a impossible situation.