Call For Nordic Council Intervention In UK-Iceland Dispute

The MEP has written to the Secretary General of the Nordic Council of Ministers Mr Halldór Ásgrímsson urging him to intervene, and to UK Foreign Secretary David Miliband urging him to change the present failing UK negotiating policy and accept impartial mediation.

Alyn Smith has a close connection with Iceland and the Nordic Council, having been a member of the European Parliament's delegation for relations with Iceland, Norway and Switzerland since his election in 2004. He is also a member of the Parliament's Temporary Committee of Inquiry into the Financial Crisis.

Speaking from Edinburgh, Smith said:

"I have watched with increasing unease as the UK government has botched this, poisoning our relations with one of our closest friends. This is a complicated and sensitive dispute but I think that with a bit of goodwill is capable of resolution, and the way the UK government has acted has, I fear, squandered any chance of that. I want to see an impartial honest broker step in before it is too late.

"For the UK to use terrorist legislation against a friendly neighbour was unforgivable. There were other options open to the UK authorities and I criticised the decision to put the Icelandic central bank on the same footing as Al Quaeda publicly at the time and warned then that it would make resolution harder, not easier. I fear that this is turning out to be all too true.

"Iceland is the world's oldest democracy and the people are in charge: the people who were no more responsible for the irresponsible actions of their bankers or their former government than the Scots population were responsible for the excesses at our banks. Crucially, the Icelanders were also not responsible for manifest regulatory failure of the UK authorities to adequately protect the UK consumers who should have been warned much more clearly of the true status of these investments.

"The extremely narrow vote in the Althingi, the Icelandic Parliament, and subsequent rejection of that deal by the President means that under Iceland's constitution there will be a referendum on the compensation package. Given the resentment caused by the UK government, I predict a no vote. The negotiations then have nowhere else to go unless someone impartial steps in and we see a bit of humility on all sides.

"The Nordic Council is well used to handling tricky negotiations, so I think it eminently possible for some sort of framework to be devised which would allow discussions to continue. Presently I think they are hurtling towards the edge of a cliff and everyone will lose."