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Darling: 'Iceland couldn't cope'

By Faisal Islam

Updated on 24 October 2008

Chancellor Alistair Darling responds to accusations that he 'over egged' the inability of the Icelandic government to reimburse British savers.

Interview transcript

Q: The Icelandic authorities have put out a transcript of a conversation. They say that you over-egged the extent to which they weren't going to reimburse depositors. What's your response that you acted precipitously?

A: "I was in no doubt from a conversation I had with the finance minister, the whole conversation, not just one part of it, that the Icelandic government was not going to be able to help British depositors. That's why I had to announce that we would step in and safeguard their position.

"Now actually they still haven't safeguarded the position of British depositors.

"I have sent out two treasury teams to Iceland and I am afraid as of today we still don't have an agreement with them.

"Now we are working with the Icelandic government and with the IMF who are probably going to have to help the Icelandic government. But one of the conditions that I want is that British depositors' position is safeguarded.

"So I am afraid I was left in no doubt when I spoke to them at the beginning of this month that the British depositors were not going to be included and I want them to be included."

"But I am afraid as of today the Icelandic government still has not done that."

Q: The tax payers have stood in - do you have any confidence that this money, billions of pounds, potentially, will return to the tax payer

A: "We are discussing these things. I have had several conversations with the Iceland finance minister and Prime Minister and have said we are ready to work with the Icelandic government and I would really like to see that happen. But I am afraid so far, here we are reaching the end of October and we still don't have an agreement with them."

"Now in the meantime, I have made it very clear that as far as depositors here in the United Kingdom are concerned, I have stepped in, so we can look after their interests and we will make an announcement to how we will do that pretty shortly."

"But I also need to secure the general tax payers' interest that's why I need a longer term agreement and we are working with the Icelandic government and with the IMF to whom the Icelandic government has gone in order to try and bring that about."

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