Iceland on road to recovery

ICELAND has agreed better terms on repaying Britain and the Netherlands over failed online bank Icesave, bringing the island a step closer to recovery from its financial crisis.

In a crash that symbolised the global financial crisis, Iceland's indebted banks collapsed at the end of 2008. The country took an IMF bailout and imposed currency controls to protect the crown, which an Icesave deal could help ease.

Britain and the Netherlands covered more than 3bn in losses incurred by British and Dutch Icesave account holders after Icelandic parent Landsbanki collapsed in October 2008.

"This (the new agreement) is significantly more advantageous to Iceland and that will play a role in the public perception of it," U.S. attorney Lee C. Buchheit, who headed Iceland's negotiating team, referring to a previous deal rejected by Icelandic voters in March.

The agreement, which could also pave the way for better relations between the various countries and may help to speed up Iceland's membership negotiations with the European Union, also still needs political approval.