The plan to lift capital controls, unveiled on Monday will provide the government with an unprecedented windfall, according to an advisor to the government. The government projects that its exit-tax on foreign investors, which is a key component of its plan to lift capital controls, will net at least 850 billion krónur (ISK) in revenue (6.4 billion USD/5.7 billiion EUR).
In an interview with the National Broadcasting Service, Lee Buchheit argues the plan will lead to an unprecedented windfall for the Icelandic treasury.
Sigmundur Davíð Gunnlaugsson, the Prime Minister of Iceland, has stated that a large part of the projected revenue will be used to lower the government’s debt. He estimates that the government debt burden might drop by as much as 30%, and annual interest payments might be reduced by 45 billion ISK (340 million USD/300 billion EUR).
Buchheit, who is an American lawyer specializing in Eurocurrency loan agreements has been advising the Icelandic government on its negotiations with foreign creditors and investors holding Icelandic assets since 2010.
The plan, unveiled on Monday, following a unusual Sunday night session of Parliament, where last-minute legislation was approved to ensure its effectiveness, threatens foreign investors holding claims on the Icelandic banks which collapsed in 2008, with a 39% exit tax if they do not reach an agreement with the government by the end of the year.
The majority of the investors have reportedly already agreed to the government’s conditions, which stipulate that they relinquish a large portion of their assets which are denominated in Icelandic króna.
The plan to lift capital controls, unveiled on Monday will provide the government with an unprecedented windfall, according to an advisor to the government. The government projects that its exit-tax on foreign investors, which is a key component of its plan to lift capital controls, will net at least 850 billion krónur (ISK) in revenue (6.4 billion USD/5.7 billiion EUR).
In an interview with the National Broadcasting Service, Lee Buchheit argues the plan will lead to an unprecedented windfall for the Icelandic treasury.
Sigmundur Davíð Gunnlaugsson, the Prime Minister of Iceland, has stated that a large part of the projected revenue will be used to lower the government’s debt. He estimates that the government debt burden might drop by as much as 30%, and annual interest payments might be reduced by 45 billion ISK (340 million USD/300 billion EUR).
Buchheit, who is an American lawyer specializing in Eurocurrency loan agreements has been advising the Icelandic government on its negotiations with foreign creditors and investors holding Icelandic assets since 2010.
The plan, unveiled on Monday, following a unusual Sunday night session of Parliament, where last-minute legislation was approved to ensure its effectiveness, threatens foreign investors holding claims on the Icelandic banks which collapsed in 2008, with a 39% exit tax if they do not reach an agreement with the government by the end of the year.
The majority of the investors have reportedly already agreed to the government’s conditions, which stipulate that they relinquish a large portion of their assets which are denominated in Icelandic króna.
