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Bid to return councils' millions Iceland money talks 'positive'
(about 2 hours later)
The Scottish secretary has said he will do "whatever it takes" to ensure the return of £46m of Scots councils' cash locked in crisis-hit Icelandic banks. The Scottish secretary has said he is "satisfied" with the outcome of talks aimed at recovering Scots council cash locked in Icelandic banks.
Jim Murphy travelled to the country for high-level talks with Icelandic Prime Minister Geir Haarde on agreeing a way forward. Jim Murphy travelled to Reykjavik for high-level talks with Icelandic Prime Minister Geir Haarde on agreeing a way forward.
Mr Murphy used the meeting to also call for the return of money deposited in Iceland by several Scottish charities. Eight Scottish councils had a total of £46m in Icelandic banks before they fell victim to the global money crisis.
Strathclyde Fire Board and several charities have also had money frozen.
A Scottish Government source welcomed the Scottish secretary's move.A Scottish Government source welcomed the Scottish secretary's move.
It emerged last month that eight Scottish councils and a fire board invested around £45m in Icelandic banks including Landsbanki, Heritable and Glitnir.
Total UK deposits are estimated at around £4bn in the country's financial institutions.
Mr Murphy said Scottish councils and charities had invested millions in Icelandic banks in good faith, before the country's banking system was severely hit by the global financial crisis.Mr Murphy said Scottish councils and charities had invested millions in Icelandic banks in good faith, before the country's banking system was severely hit by the global financial crisis.
Diplomatic row 'Domestic savers'
He told BBC Scotland: "Our relationship with Iceland has traditionally been a very good one, but, of course, there are pressures at the moment, particularly because of the international credit crisis and the collapse of the Icelandic banks. Speaking after the meeting, he said: "This has been a positive visit. Mr Haarde and his government have been hospitable and helpful and we are all agreed that it is important to find a constructive and co-operative way forward that allows the technical experts to work on the detail of recovering UK savers' money.
"There is Scottish council and Scottish charity money invested in some of those banks and I'm seeking to persuade the Icelandic Government that money should be returned. "Our ultimate aim is a shared one, which is to achieve the stability of the banking sector, not only here in Iceland but across Europe and further afield.
"We've made very clear, we'll do whatever it takes to support Scottish people to get their money out of the Icelandic banking crisis." "The UK Government's primary objective remains to secure the investments of the 300,000 depositors, plus many local authorities, held in the failed Icelandic banks.
The UK Government is currently trying to salvage £4bn in deposits held by customers in the failed Icelandic bank Icesave, at risk after its parent firm Landsbanki folded. "This includes as many as 30,000 Scottish domestic savers and a significant number of Scottish local authorities. So there is lots of technical work to be done but I am determined that progress is made."
The bank's collapse fuelled a diplomatic row after ministers froze assets of other Icelandic banks. Total UK deposits are estimated at about £4bn in Iceland's financial institutions.