Iceland's Leader Slams Gordon Brown Over Crisis

By Ed Conway, Economics Editor, in Davos

The President of Iceland has launched an extraordinary verbal attack on Gordon Brown on the fringes of the World Economic Forum in Davos.

Olafur Ragnar Grimsson, the country's longest-serving president, told Sky News that his country would "never forget" its treatment during the financial crisis at the hands of the former British prime minister.

During the financial crisis, following the collapse of Icelandic bank Icesave and Iceland's refusal to refund UK deposits, Britain took the rare step of imposing financial sanctions on the country.

Mr Grimsson told Sky News: "The Gordon Brown government decided, to its eternal shame, to put the Icelandic government on a list of terrorist states and terrorist phenomena. We were there together with al Qaeda and the Taliban on that list.

"We have not forgotten that in Iceland.

The Icesave website was used by British bank account holders

"Gordon Brown will be long remembered in my country for centuries to come, long after he has been completely forgotten in Britain."

Mr Brown is also in Davos to speak on panels about development and youth activism.

Mr Grimsson said the estate of the bank had managed to recover enough assets to "pay back to those who have deposits and the British authorities everything which can be reasonably required".

An EFTA court is due on Monday to give a legal verdict as to whether Iceland's actions were appropriate, however Mr Grimsson said this will only be advisory, and that "it will not lead to any financial obligations or transactions of any sort".

The president also signalled his country may soon abandon its plans to join the European Union.

Iceland started formal negotiations towards becoming an EU member in 2009, but this week suspended it for what was expected to be a number of months.

However, when asked whether he could foresee his country joining the EU in his term, which still has three-and-a-half years to run, Mr Grimsson said: "If you want me to take a bet, I would definitely say no."

Icesave protesters in Iceland demonstrated outside the country's parliament

He added: "It's quite clear both in my country and other parts of northern Europe that there is a growing scepticism about the way the European Union is moving forward.

"In the last three years the eurozone has revealed itself to be a different kind of animal.

"We have decided to take a pause, not to move forward at all in the coming months, and then to revisit the issue sometime later.

"We don't want to drag the process on for long. Later this year we will face the decision of whether we call the discussions off altogether ... or whether we prolong the talks which have now been created.

"There is no strong political force in my country arguing that we need to finish the negotiations quickly because we want to join the European Union."

Coming on the back of David Cameron's announcement of plans for a prospective in-out referendum on Britain's membership, the comments represent a further blow for the EU.

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