Iceland's parliament approved on Wednesday an amended bill to repay more than $5 billion lost by savers in Britain and the Netherlands when the island's banks collapsed.

The passage of the legislation boosts the country's chances of swift entry to the European Union and of getting its shattered economy back on track.

Approving the bill is the better option and will avoid even more economic damage, Steingrimur Sigfusson, Finance Minister and leader of the Left-Green party said during the debate.

History will show that we are doing the right thing.

(Reporting by Omar Valdimarsson)