Bloomberg Calls for Spending Limits, but No Tax Increases

Despite the prospect of losing hundreds of millions of dollars in state funding for education, continuing labor-contract disputes and the cost of rebuilding after Hurricane Sandy, Mayor Michael R. Bloomberg said on Tuesday that there would be no tax increases even as he called for agencies across the city to find savings.

He cited the improving national economy, the recovery on Wall Street and the city’s increasingly diversified economy as reasons the city was in decent financial shape.

In his final budget proposal after 11 years in office, Mr. Bloomberg said that New York schools could be hit the hardest, mainly as a result of the failure to reach an agreement with the teachers’ union over an evaluation system.

“We expect our schools to take a $250 million hit in the current fiscal year,” Mr. Bloomberg said. That would mean that there would be hundreds of fewer teachers, mainly through attrition.

While noting the many challenges the city faces, he said the city’s $70.1 billion budget would protect all vital services even as individual agencies worked to keep their spending in check.

“The financial plan presented today continues to protect critical services and foster economic growth, while also taking the responsible, budget-minded actions that have resulted in a more efficient city government,” Mr. Bloomberg said.

Hurricane Sandy has cost the city $4.5 billion in emergency services and damage to public infrastructure, he said.

“We do expect that all of those costs will be covered by federal funding,” he said.

The mayor’s budget outline marks the starting point for what will most likely be months of negotiations with city lawmakers before the official start of the fiscal year on July 1.

By law, the mayor and the City Council must agree on a balanced budget each fiscal year.

Mr. Bloomberg said that the loss of education money would have an impact on schools across the city.

To make up for the lost money, the city would keep 700 fewer teachers on the payroll, with staff reductions coming mainly through attrition, “as well as the reduction of funds for extracurricular activities and after-school programming,” according to a budget summary provided by the administration.

“The cuts would have a direct and dire impact on classrooms across the city and will be borne by the students who need and deserve high-quality education,” according to the statement.

In outlining his budget, Mr. Bloomberg noted the city’s continued commitment to education, saying that the $13.9 billion budget for education he proposed on Tuesday was $8 billion more than when he took office.

Mr. Bloomberg said that while there would be no tax increases, he expected tax revenues to be $222 million greater than initial projections.

“I am reasonably optimistic that we will have a small increase in our tax revenues,” he said.

But the budget also relies heavily on the cost-cutting measures put in place by city agencies, which he said will result in $6.5 billion in savings in 2014.

Administration officials had already warned city agencies about the likelihood of deep cuts, projecting a steep budget shortfall.

Mr. Bloomberg reiterated his warnings of coming fiscal pain during testimony in Albany on Monday, when he urged the State Legislature to intervene so that the city did not lose hundreds of millions of dollars because it missed a deadline this month to finish negotiating a teacher evaluation system.

He had also hinted, more broadly, of belt-tightening in November, when he unveiled a plan to cope with a budget shortfall for the rest of the current fiscal year, which ends on June 30.

He noted that because his plan to sell 2,000 new yellow-taxi medallions was still tied up in the courts, and up in the air, and because any additional costs related to Hurricane Sandy had not yet been determined, he felt that he had to slash a slew of programs.

While there was talk in the administration about an increase in school lunch fees to $2.50 from $1.50 — which would have netted the city an extra $4.4 million — the plan was not included in Tuesday’s budget address.

The idea was torpedoed by Christine C. Quinn, the City Council speaker, according to city officials.

The mayor’s proposed budget could change significantly after wrangling with lawmakers.

Last year, for instance, additional money that poured into the city’s coffers enabled the city to avoid cutting child-care and after-school programs, and to keep open firehouses.

But this year’s budget “sidesteps some crucial issues,” according to the city’s Independent Budget Office, like uncertain education funding, Medicaid reimbursements, taxi revenues and expired labor contracts.

“While projected budget gaps may currently appear modest — certainly when compared with gaps faced in some recent years — the next mayor and City Council are likely to face significant budget challenges,” the budget office concluded.

When Mr. Bloomberg took office, he inherited a $4.8 billion deficit in a $42.3 billion budget.

Mr. Bloomberg vowed that he would not pass along a similar debt to his successor, making a habit of stashing away extra revenue in years when the city ran a budget surplus.

“I’m determined that when I leave the city, we won’t have, my successor, the first year in office, won’t have enormous deficits to deal with,” Mr. Bloomberg said in 2007.

Despite the challenges the city faces, Mr. Bloomberg said he was determined to keep the budget balanced while not cutting essential services.

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Apple announces iPad with double storage capacity

(Reuters) - Apple Inc said on Tuesday that it will sell a version of its iPad tablet computer with 128 gigabytes of storage, which is twice the capacity of its existing models.

Apple, which has sold more than 120 million iPads so far, said that the new iPad will go on sale February 5, in black or white, for a suggested retail price of $799 for the iPad with just Wi-Fi model, and $929 for the version that also has a cellular wireless connection.

(Reporting By Sinead Carew; Editing by Gerald E. McCormick)

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Chris Cuomo leaving ABC News for CNN

NEW YORK (AP) — Chris Cuomo is leaving ABC News to host a new morning show at CNN, where new boss Jeff Zucker is moving fast to try to turn around the cable news pioneer that has fallen on hard times.

Network managing editor Mark Whitaker announced he was quitting Tuesday, officially Zucker's seventh day on the job as CNN Worldwide president. Longtime political consultants and commentators James Carville and Mary Matalin also are leaving.

Cuomo is expected to be paired with current evening anchor Erin Burnett in the mornings. CNN said Tuesday it was discussing other job options with Soledad O'Brien, who will be ending her second stint as morning show co-host.

"Chris is an accomplished anchor who is already an established name in morning television," Zucker said. "What I love about Chris is that he is passionate about every story he tells, never forgets about the viewer and represents the type of journalism that makes CNN great."

In addition to the broadcast morning shows, CNN is competing with two distinctive cable news morning programs in Fox News Channel's "Fox & Friends" and MSNBC's "Morning Joe."

Zucker was the "Today" show executive producer as the show began dominating morning television in the mid-1990s, before moving up in the NBC executive suite, and he is expected to work closely in developing the new morning show. He was largely responsible for Matt Lauer and Meredith Vieira getting their jobs at "Today."

Cuomo, the "20/20" co-anchor, is the second big defection from ABC to CNN in a little more than a month, the other being Jake Tapper.

Both men found their paths to higher-profile jobs at ABC blocked. Cuomo, who was news anchor at "Good Morning America" from 2006 to 2009, was passed over for George Stephanopoulos as co-host of that show while Tapper twice didn't get a shot at the anchor job on "This Week," first when Stephanopoulos left and then when he returned to the Sunday show.

Both Cuomo and Tapper will have their own daily programs on CNN, which generally runs third in the ratings behind Fox and MSNBC but improves during big news events.

Cuomo wasn't made available for comment. He said in a statement that "this is a fantastic opportunity to do what I value the most and hopefully to do the work that I do best."

CNN was scooped on the announcement of Cuomo's hiring by the newsman's older brother, New York Gov. Andrew Cuomo, who mentioned it during a radio interview Tuesday morning.

ABC News moved quickly to replace Cuomo, appointing correspondent David Muir as Elizabeth Vargas' new co-host on the prime-time newsmagazine.

Whitaker came to CNN in 2011 as senior vice president and managing editor and tried to expand CNN's programming, opening a film division and hiring Morgan Spurlock and Anthony Bourdain for weekend shows that haven't started yet.

With Zucker and "his own forceful ideas" about CNN's direction and programming options, Whitaker said the new chief deserved a chance to build his own management team.

The Cajun commentator Carville, a former Bill Clinton political aide, has delivered opinions on CNN since 2002. His wife, Mary Matalin, came on at the end of the Bush administration in 2009.

___

Associated Press writer Michael Gormley in Albany, N.Y. contributed to this report.

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Well: Ask Well: Long-Term Use of Nicotine Gum

In small doses, like those contained in the gum, nicotine is generally considered safe. But it does have stimulant properties that can raise blood pressure, increase heart rate and constrict blood vessels. One large report from 2010 found that compared to people given a placebo, those who used nicotine replacement therapies had a higher risk of heart palpitations and chest pains.

That’s one reason that nicotine gum should, ideally, be used for no more than four to six months, said Lauren Indorf, a nurse practitioner with the Cleveland Clinic’s Tobacco Treatment Center. Yet up to 10 percent of people use it for longer periods, in some cases for a decade or more she said.

Some research has raised speculation that long-term use of nicotine might also raise the risk of cancer, though it has mostly involved laboratory and animal research, and there have not been any long-term randomized studies specifically addressing this question in people. One recent report that reviewed the evidence on nicotine replacement therapy and cancer concluded that, “the risk, if any, seems small compared with continued smoking.”

Ultimately, the biggest problem with using nicotine gum for long periods is that the longer you stay on it, the longer you remain dependent on nicotine, and thus the greater your odds of a smoking relapse, said Ms. Indorf. “What if the gum is not available one day?” she said. “Your body is still relying on nicotine.”

If you find yourself using it for longer than six months, it may be time to consider switching to sugar-free gum or even another replacement therapy, like the patch or nasal spray.

“Getting people on a different regimen helps them break the gum habit and can help taper them off nicotine,” Ms. Indorf said.

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DealBook: Gleacher to Leave His Investment Bank

9:32 a.m. | Updated with interview with Mr. Gleacher

Eric J. Gleacher, a veteran deal maker who participated in the fight over RJR Nabisco, said on Tuesday that he would leave the investment bank he founded about 23 years ago.

The departure of Mr. Gleacher as chairman comes months after his struggling firm hired Credit Suisse to explore a sale.

Gleacher & Company disclosed last month that the Nasdaq stock market had initiated a move to delist the investment bank, after its stock price lingered below $1 for months. The firm is appealing the decision.

Mr. Gleacher, 72, told DealBook in an interview on Tuesday that his decision was prompted in part by finishing work on the sale of Archstone, a massive real estate company once owned by Lehman Brothers. Since the deal was announced in late November, he has been approached by a number of companies seeking advice, and he is weighing opportunities to essentially become a freelance adviser.

“As the business model on Wall Street changes, I’m looking forward to working with C.E.O.’s and investors in helping them realize their goals,” he said. “I’m looking forward to doing so in an independent manner.”

(He has been contemplating a move for some time, having put up his Manhattan town house for sale earlier this month.)

Mr. Gleacher, a former Marine and long one of Wall Street’s top golfers, founded his company after having become one of the top deals bankers on Wall Street during the 1980s. He founded the mergers department at Lehman Brothers in 1978, and then led Morgan Stanley‘s deal team from 1985 to 1990.

He then founded his firm, maintaining it for years as an independent merger advisory shop. He sold it to the British bank Natwest in 1995, but bought it back four years later.

Mr. Gleacher and his partners decided in 2009 to sell their business to Broadpoint Securities, a small brokerage, giving rise to the current Gleacher & Company. But the firm struggled, burdened with rising regulatory constraints and tepid deal activity.

Under Thomas Hughes, Gleacher & Company’s chief executive, the investment bank has sold off businesses in an attempt to revive its flagging fortunes. In the fall, the firm explored a potential sale to a larger concern, Stifel Financial, but the talks fell apart over price, according to people briefed on the matter.

It is unclear whether the investment bank is still pursuing a sale. Mr. Hughes suggested in a statement that the firm continued to weigh its options.

“We will continue to grow our M.&A. and capital-raising capabilities in line with the vision we have described previously, a vision that Eric helped author,” Mr. Hughes said. “On behalf of the company, I want to wish Eric the best in his future endeavors.”

While striking off on his own will allow him more personal time, Mr. Gleacher added that he intended to keep busy.

“To me, retirement is just time allocation,” he said. “I’ve always just enjoyed what I’ve done.”

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DealBook: Iceland Wins Major Case Over Failed Bank

BRUSSELS — Iceland won a landmark case at a European court, ending an acrimonious legacy from the collapse of its banking system more than four years ago.

On Monday, the court upheld the country’s refusal to promptly cover the losses of British and Dutch depositors who had put more than $10 billion in Icesave, the bankrupt online offshoot of a failed Icelandic bank.

In a judgment issued in Luxembourg, the court of the European Free Trade Association, or EFTA, cleared Iceland of complaints that it violated rules governing the protection of depositors drawn up by the European Union. While Iceland is not a member of the Union, it is bound by most of its rules, as a member of EFTA.

The case has attracted widespread attention because it touches on issues of cross-border banking that have been at the center of the European Union’s efforts to ensure the future stability of the region’s financial system. The Iceland banking collapse in 2008 — and the mayhem it caused far beyond the country’s borders — raised issues directly relevant to the 27-nation Union.

Monday’s court ruling in Luxembourg was a significant victory for Iceland. Unlike Ireland, Iceland declined to use taxpayer money to bail out foreign bondholders and depositors. This caused a bitter dispute with Britain, which used antiterrorism rules to take control of assets held in Britain by Icesave’s parent, Landsbanki.

In a recent interview with British television, Iceland’s president, Olafur Ragnar Grimsson, denounced Britain for its legal justification for seizing Icelandic assets. “We were there together with al Qaeda and the Taliban on that list,” he said. “We have not forgotten that in Iceland.” He referred to the maneuver as Britain’s “eternal shame.”

After the 2008 crash, the government tried twice to settle the Icesave debts. But the country’s voters, asked to approve settlement plans in two separate referendums, rejected the proposals. Foreign holders of bonds issued by Icesave’s corporate parent, Landsbanki, and two other failed Icelandic banks lost some $85 billion. Those losses were not at issue in the Luxembourg case, which involved only customers with bank deposits.

Iceland’s government, in a statement by its foreign ministry after Monday’s verdict, said Landsbanki had already paid out some $4.5 billion to Icesave depositors, covering nearly half of all initial claims by individuals, charities and others in Britain and the Netherlands. The ministry said the bank would eventually reimburse the rest.

“It is a considerable satisfaction that Iceland’s defense has won the day in the Icesave case,” the government said in its statement. The Luxembourg ruling, it added, “brings to a close an important stage in a long saga,” and “Icesave is now no longer a stumbling block to Iceland economic recovery.”

Iceland’s economy, which went into a nosedive after the banking crash, is now growing again. The credit-rating agency Fitch recently raised its rating of the country’s debt, noting that its ‘‘unorthodox crisis policy response has succeeded in preserving sovereign creditworthiness.’’

But the Icesave saga has clouded the recovery.

Icesave collapsed in October 2008 along with its parent, Landsbanki, and the rest of Iceland’s banking sector. Caught in the wreckage were some 350,000 people in Britain and the Netherlands who, lured by unusually high interest rates, had put their money in Icesave accounts.

The government protected the deposits of Icelanders who had money in failed banks by moving them into new, solvent versions of the banks. But it declined to cover the losses of foreigners with online accounts operated by Icesave, a move that prompted complaints of illegal discrimination to the court in Luxembourg.

The case against Iceland was bought by the Surveillance Authority of the European Free Trade Association and revolved around interpretation of a European Union directive requiring that deposits in European banks be covered equally by deposit guarantee systems. Britain and the Netherlands supported the case.

But the court, according to a statement summarizing the verdict, ruled that the directive on guaranteeing bank deposits did not oblige Icelandic authorities to ensure immediate payment to depositors in Britain and the Netherlands “in a systemic crisis of the magnitude experienced in Iceland.”

Iceland argued that all Icesave depositors would eventually get their money back, but that the government, confronted in 2008 with a total breakdown of the financial system, did not have the means to offer immediate payment of all claims. The court also cleared Iceland of complaints that it violated nondiscrimination rules when it protected domestic depositors by moving their accounts to solvent new banks but reneged on protecting foreign depositors in Icesave.

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Siemens picks banks for two disposals: sources

FRANKFURT (Reuters) - Siemens AG has picked banks to organize the sale of two units as part of its efforts to streamline operations and stay competitive in a weak global economy, people familiar with the matter said.

Goldman Sachs Group Inc will advise the German conglomerate on the sale of its Water Technologies units, while Rothschild will oversee the divestment of its smaller security products arm, which makes access card readers and technology for intruder detection and surveillance, the sources said on Monday.

Siemens, Goldman and Rothschild all declined comment.

Siemens, which ranks as Germany's second-most valuable company and which makes products ranging from trains to hearing aids, late last year announced the plan to divest several units in a bid to focus on its most profitable businesses.

It also aims to put itself in a better position to compete in core product areas with the likes of Switzerland's ABB Ltd and U.S.-based General Electric Co.

Since then, several possible bidders for the water unit - which has annual sales of about 1 billion euros ($1.4 million) and employs 600 - have approached the Munich-based group and investment bankers have started to work on the possible sale, the sources said.

HATS IN THE RING

Siemens built up its water technology operations through a flurry of acquisitions over the last decade, buying the water systems and services division of U.S. Filter from Veolia Environnement for instance for $1 billion in 2004.

Since much of Siemens's water business is focused on North America, industry sources expect U.S.-based peers Xylem Inc and Pentair Ltd to take a look at the asset.

"Asian companies are also likely to throw their hats into the ring," one of the people said.

The region is experiencing rapid economic growth, climate change effects, rising populations and stricter energy and water regulations and is therefore expected to see heavy investment in water treatment equipment in coming years, he said.

Kurita Water Industries Ltd, Hyflux Ltd, Hitachi Ltd and Marubeni Corp are seen as possible suitors, he added.

Big private equity groups like KKR & Co LP, Bain and Permira are also expected to show interest.

Permira in 2011 bought Israel-based Netafim, a maker of irrigation technology, for 800 million euros.

Siemens Water Technologies offers products ranging from conventional water treatment to emergency water supply and water disinfection systems.

A report published in 2010 by Global Water Intelligence, an industry journal, put the size of the global water market at more than $500 billion.

Siemens shares were down 0.3 percent by 8.25 a.m, backtracking from a five-month high set last week, compared with a 0.1 percent drop in the main German index.

(Additional reporting by Jens Hack; Editing by Hans-Juergen Peters)

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Barbara Walters hospitalized with chickenpox

NEW YORK (AP) — Barbara Walters would probably like to hit the reset button on 2013.

She's got the chickenpox and remains hospitalized more than a week after going in after falling and hitting her head at a pre-inaugural party in Washington on Jan. 19. A fellow host on the "The View," Whoopi Goldberg, said Monday that Walters has been transferred to a New York hospital and hopes to go home soon.

"She's been told to rest. She's not allowed any visitors," Goldberg said. "And we're telling you, Barbara, no scratching!"

The 83-year-old news veteran, who underwent heart surgery in May 2010, apparently avoided a disease that hits most people when they are children. It can be serious in older people because of the possibility of complications like pneumonia.

Even after concern about her fall had subsided, Walters had been kept hospitalized last week because of a lingering fever, and doctors found the unexpected cause.

"We love you, we miss you," Goldberg said on "The View," in a message to the show's inventor. "We just don't want to hug you."

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Well: Keeping Blood Pressure in Check

Since the start of the 21st century, Americans have made great progress in controlling high blood pressure, though it remains a leading cause of heart attacks, strokes, congestive heart failure and kidney disease.

Now 48 percent of the more than 76 million adults with hypertension have it under control, up from 29 percent in 2000.

But that means more than half, including many receiving treatment, have blood pressure that remains too high to be healthy. (A normal blood pressure is lower than 120 over 80.) With a plethora of drugs available to normalize blood pressure, why are so many people still at increased risk of disease, disability and premature death? Hypertension experts offer a few common, and correctable, reasons:

¶ About 20 percent of affected adults don’t know they have high blood pressure, perhaps because they never or rarely see a doctor who checks their pressure.

¶ Of the 80 percent who are aware of their condition, some don’t appreciate how serious it can be and fail to get treated, even when their doctors say they should.

¶ Some who have been treated develop bothersome side effects, causing them to abandon therapy or to use it haphazardly.

¶ Many others do little to change lifestyle factors, like obesity, lack of exercise and a high-salt diet, that can make hypertension harder to control.

Dr. Samuel J. Mann, a hypertension specialist and professor of clinical medicine at Weill-Cornell Medical College, adds another factor that may be the most important. Of the 71 percent of people with hypertension who are currently being treated, too many are taking the wrong drugs or the wrong dosages of the right ones.

Dr. Mann, author of “Hypertension and You: Old Drugs, New Drugs, and the Right Drugs for Your High Blood Pressure,” says that doctors should take into account the underlying causes of each patient’s blood pressure problem and the side effects that may prompt patients to abandon therapy. He has found that when treatment is tailored to the individual, nearly all cases of high blood pressure can be brought and kept under control with available drugs.

Plus, he said in an interview, it can be done with minimal, if any, side effects and at a reasonable cost.

“For most people, no new drugs need to be developed,” Dr. Mann said. “What we need, in terms of medication, is already out there. We just need to use it better.”

But many doctors who are generalists do not understand the “intricacies and nuances” of the dozens of available medications to determine which is appropriate to a certain patient.

“Prescribing the same medication to patient after patient just does not cut it,” Dr. Mann wrote in his book.

The trick to prescribing the best treatment for each patient is to first determine which of three mechanisms, or combination of mechanisms, is responsible for a patient’s hypertension, he said.

¶ Salt-sensitive hypertension, more common in older people and African-Americans, responds well to diuretics and calcium channel blockers.

¶ Hypertension driven by the kidney hormone renin responds best to ACE inhibitors and angiotensin receptor blockers, as well as direct renin inhibitors and beta-blockers.

¶ Neurogenic hypertension is a product of the sympathetic nervous system and is best treated with beta-blockers, alpha-blockers and drugs like clonidine.

According to Dr. Mann, neurogenic hypertension results from repressed emotions. He has found that many patients with it suffered trauma early in life or abuse. They seem calm and content on the surface but continually suppress their distress, he said.

One of Dr. Mann’s patients had had high blood pressure since her late 20s that remained well-controlled by the three drugs her family doctor prescribed. Then in her 40s, periodic checks showed it was often too high. When taking more of the prescribed medication did not result in lasting control, she sought Dr. Mann’s help.

After a thorough work-up, he said she had a textbook case of neurogenic hypertension, was taking too much medication and needed different drugs. Her condition soon became far better managed, with side effects she could easily tolerate, and she no longer feared she would die young of a heart attack or stroke.

But most patients should not have to consult a specialist. They can be well-treated by an internist or family physician who approaches the condition systematically, Dr. Mann said. Patients should be started on low doses of one or more drugs, including a diuretic; the dosage or number of drugs can be slowly increased as needed to achieve a normal pressure.

Specialists, he said, are most useful for treating the 10 percent to 15 percent of patients with so-called resistant hypertension that remains uncontrolled despite treatment with three drugs, including a diuretic, and for those whose treatment is effective but causing distressing side effects.

Hypertension sometimes fails to respond to routine care, he noted, because it results from an underlying medical problem that needs to be addressed.

“Some patients are on a lot of blood pressure drugs — four or five — who probably don’t need so many, and if they do, the question is why,” Dr. Mann said.

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How to Measure Your Blood Pressure

Mistaken readings, which can occur in doctors’ offices as well as at home, can result in misdiagnosis of hypertension and improper treatment. Dr. Samuel J. Mann, of Weill Cornell Medical College, suggests these guidelines to reduce the risk of errors:

¶ Use an automatic monitor rather than a manual one, and check the accuracy of your home monitor at the doctor’s office.

¶ Use a monitor with an arm cuff, not a wrist or finger cuff, and use a large cuff if you have a large arm.

¶ Sit quietly for a few minutes, without talking, after putting on the cuff and before checking your pressure.

¶ Check your pressure in one arm only, and take three readings (not more) one or two minutes apart.

¶ Measure your blood pressure no more than twice a week unless you have severe hypertension or are changing medications.

¶ Check your pressure at random, ordinary times of the day, not just when you think it is high.

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DealBook: Iceland Wins Major Case Over Failed Bank

BRUSSELS — Iceland won a landmark case at a European court, ending an acrimonious legacy from the collapse of its banking system more than four years ago.

On Monday, the court upheld the country’s refusal to promptly cover the losses of British and Dutch depositors who put more than $10 billion in Icesave, the bankrupt online offshoot of a failed Icelandic bank.

In a judgment issued in Luxembourg, the court of the European Free Trade Association, or EFTA, cleared Iceland of complaints that it violated rules governing the protection of depositors drawn up by the European Union. While Iceland is not a member of the Union, it is bound by most of its rules, as a member of EFTA.

The case has attracted widespread attention because it touches on issues of cross-border banking that have been at the center of the European Union’s efforts to ensure the future stability of the region’s financial system. The Iceland banking collapse in 2008 — and the mayhem it caused far beyond the country’s borders — raised issues directly relevant to the 27-nation Union.

Monday’s court ruling in Luxembourg marks a significant victory for Iceland. Unlike Ireland, Iceland declined to use taxpayer money to bail out foreign bondholders and depositors. This triggered a bitter dispute with Britain, which used anti-terrorism rules to take control of assets held in Britain by Icesave’s parent, Landsbanki.

In a recent interview with British television, Iceland’s president Olafur Ragnar Grimsson denounced Britain for its legal approach — using anti-terrorist rules — to seize Icelandic assets. “We were there together with al Qaeda and the Taliban on that list,” he said. “We have not forgotten that in Iceland.” He referred to the maneuver as Britain’s “eternal shame.”

After the 2008 crash, the Icelandic government tried twice to settle the Icesave debts. But the country’s voters, asked to approve settlement plans in two separate referenda, rejected the proposals. Foreign holders of bonds issued by Icesave’s corporate parent, Landsbanki, and two other failed Icelandic banks lost some $85 billion. Those losses were not at issue in the Luxembourg case, which involved only customers with bank deposits.

The Iceland government, in a statement by its foreign ministry after Monday’s verdict, said that Landisbanki had already paid out some $4.5 billion to Icesave depositors, covering nearly half of all initial claims by individuals, chartities and others in Britain and the Netherlands. The ministry said the bank would eventually reimburse the rest.

“It is a considerable satisfaction that Iceland’s defense has won the day in the Icesave case,” the Icelandic government said in its statement. The Luxembourg ruling, it added, “brings to a close an important stage in a long saga” and “Icesave is now no longer a stumbling block to Iceland economic recovery.”

Iceland’s economy, which went into a nosedive after the banking crash, is now growing again. The credit-rating agency Fitch recently raised its rating of the country’s debt, noting that its ‘‘unorthodox crisis policy response has succeeded in preserving sovereign creditworthiness.’’

But the Icesave saga has clouded the recovery.

Icesave collapsed in October 2008 along with its parent, Landsbanki, and the rest of Iceland’s banking sector in a spectacular blowout. Caught in the wreckage were some 350,000 people in Britain and the Netherlands who, lured by unusually high-interest rates, had put their money in Icesave accounts.

The Icelandic government protected the deposits of Icelanders who had money in failed banks by moving them into new, solvent versions of the banks. But the government declined to cover the losses of foreigners with on-line accounts operated by Icesave, a move that prompted complaints of illegal discrimination to the court in Luxembourg.

The case against Iceland was bought by the Surveillance Authority of the European Free Trade Association and revolved around interpretation of a European Union directive requiring that deposits in European banks be covered equally by deposit guarantee systems. Britain and the Netherlands supported the case.

But the court, according to a statement summarizing the verdict, ruled that the directive on guaranteeing bank deposits did not oblige Icelandic authorities to ensure immediate payment to depositors in Britain and the Netherlands “in a systemic crisis of the magnitude experienced in Iceland.”

Iceland argued that all Icesave depositors will eventually get their money back but that the government, confronted in 2008 with a total breakdown of the financial system, did not have the means to offer immediate payment of all claims. The court also cleared Iceland of complaints that it violated non-discrimination rules when it protected domestic depositors by moving their accounts to solvent new banks but reneged on protecting foreign depositors in Icesave.

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