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Latest update: 06/01/2010
- financial crisis - Iceland - referendum
Referendum due after president rejects ‘Icesave’ repayments
Icelandic voters will go to a referendum to decide whether the country will repay five billion dollars to UK and Dutch investors who lost out when the island’s banking sector collapsed.
Icelandic President Olafur Grimsson has called for a referendum to decide if the country should repay savers in the UK and the Netherlands who lost out when Icelandic bank accounts collapsed.
A bill, dubbed ‘Icesave’ after the failed private investment firm in question, was due to be signed on Tuesday and would have seen the Icelandic taxpayer reimbursing five billion dollars to luckless investors.
But because the bill was vetoed at the last minute, the decision will be in the hands of Iceland’s voters for a referendum decision.
It is only the second time in the Icelandic republic’s 65-year history that the president has vetoed a bill at the last minute.
The move to block the bill came after 60,000 Icelanders – a quarter of the country’s voters - signed a petition calling for the Icesave bill to be blocked.
EU membership in jeopardy
Icelandic critics say Britain and the Netherlands are using their EU veto and IMF voting power to bully the country's taxpayers into reimbursing savers who imprudently poured money into Icesave, a private firm that offered high interest rates.
But supporters of the bill say that failure to pass it through risks jeopardizing much needed aid as well as the country’s aspirations to join the EU.
Prime Minister Johanna Sigurdardottir said the government was committed to honouring its debts. She questioned whether the president had the right to force a referendum on such matters but did not suggest the government would try to avoid one.
"It is debatable whether it is politically and constitutionally correct for the president to use his right to submit the issue to a national referendum when it concerns an international issue such as Icesave where the government seeks to honour its international commitments," she said.
Ms Sigurdardottir’s government had threatened to resign if the bill was not passed, throwing the country into yet more uncertainty as preparations are made for a referendum to take place.
Reactions from the UK and the Netherlands
The Dutch government said it was "very disappointed" and would demand an immediate explanation.
British Finance Minister Alistair Darling called on Iceland to honour its debts, especially in light of the country’s aspirations to become a full member of the European Union. Since the financial crisis - which hit the small island nation harder than most - EU membership has been high on Iceland’s priorities.
"An agreement has been reached with us and the Dutch government and I really think it should be implemented because otherwise I think it will just make things far more difficult than they need be," Darling said.
Britain and the Netherlands have veto power over Iceland's EU membership bid and could block the entry negotiations.
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An Icelanders opinion on Iceasve
In the first paragraph of the latest update on the icesave "deal" i'd like point out some mistakes.
First of all: Denying this deal that has been made between our government and the British/Dutch is not the case here. Mr. Grimsons veto is a statement to the world that the people of Iceland should have a collective voice in how we should pay, and not that we are refusing to pay.
Second: The veto is not about us not paying. Every Icelander is outraged by how the British government and the national community has bullied us into the deal we were about to put into law. Yes we know things could have been handled better on behalf of our past and current government but this bullying and external pressure is not helping us make a decision that will affect our economy and every single Icelandic person including future generations.
As a final word. I and most Icelanders are appalled by how the international media has followed this story. the media continuously and ignorantly reports that Mr Grimson decision to not sign the Icesave deal is reflective of all Icelanders NOT wanting to pay anything back. This is the misundertanding.
While it is an unfortuate situation that Iceland has found itself in, that does not excuse lazy, ignorant and damaging reporting. The true facts are, Icelanders would like a say in the repayment deal. Don´t forget, Iceland as a nation, is being asked to be held accountable for the mistakes of a few greedy, private businessmen, how many other nations have ever been finacially responsible for the actions of a few. Icelands desire for self preservation can not be faulted.
Misleading news on Icelanders and Iceland!
It is NOT AT ALL the question here IF ICELANDERS ARE GOING TO REPAY OR NOT to the British and/or the Dutch people. NEIGHTER dit our president REJECT by his decision "Icesave" repayments AT ALL! * * * You are wrong FRANCE 24! * * *
The question/debate here as concerns CORRECT NEWS on our President's decision today is to allow the Icelandic people themselves to juge (and vote in a referendum "for" or "against") if the "agreement" attained (including of course the terms and interests of the binding) with our two friend countries Britain and Holland is acceptable or not.
That's all - dear people of the world ... and who's first to say that's an unfair "rule of a game" in a DEMOCRATIC WESTERN country!!? Please step forward.
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