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Council's fight to recoup cash from Icelandic banks

PUBLISHED: 15:56 07 January 2010 | UPDATED: 16:41 07 September 2010

HARINGEY Council is embroiled in a cold war to recoup the millions of pounds it invested in Icelandic banks after one institution warned the money will not be repaid. Glitnir, one of the three banks to go bust under the weight of their own debt, has warne

HARINGEY Council is embroiled in a cold war to recoup the millions of pounds it invested in Icelandic banks after one institution warned the money will not be repaid.

Glitnir, one of the three banks to go bust under the weight of their own debt, has warned Haringey it will only pay back one third of the £2million the council had invested.

Haringey finance chiefs have vowed to fight on but after initially insisting residents would not be affected they now accept it is inevitable they will not recover all of the £37million invested in Iceland.

A council spokeswoman told Broadway this week they were aiming to recoup just 80 per cent of the savings. Opposition councillors reacted angrily to the news.

Leader of the Liberal Democrats Robert Gorrie said: "Labour has continually denied the fact that their mistaken investment in Icelandic banks would cost local people real money.

"Finally they have been forced to admit that the loss may be up to £7million which could have been spent on maintaining vital frontline services in these hard financial times.

"It is clear that the current Labour administration cannot be trusted with the borough's purse strings any longer."

A spokeswoman for the council said: "The administration process for the Icelandic banks in which council deposits are held is continuing, but the council remains confident of recovering more than 80 per cent of its total investments in Icelandic banks.


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