Open

Coming up

Don't miss

Replay


LATEST SHOWS

AFRICA NEWS

A landslide victory for the 'invisible candidate' in Algeria's Presidential polls

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014 (part 2)

Read more

MEDIAWATCH

Presidential adviser resigns over "shoe-shine scandal"

Read more

#THE 51%

Breaking stereotypes

Read more

#TECH 24

Galaxy S5 v. HTC One (M8): Which is the right one for you?

Read more

FRANCE IN FOCUS

New PM Manuel Valls outlines priorities

Read more

FASHION

Jean-Marc Loubier, bags and shoes.

Read more

ENCORE!

Hip-hop musician Beat Assailant on mixing the sounds of the city

Read more

  • Bouteflika, the ghost president

    Read more

  • Algeria's ailing Bouteflika clinches fourth term amid fraud claims

    Read more

  • Does Valls’ upcoming Vatican trip violate French secularism?

    Read more

  • Police arrest S. Korea ferry captain for negligence

    Read more

  • Ukraine separatists say ‘not bound’ by Geneva deal

    Read more

  • Obama signs bill to block controversial Iran diplomat from UN post

    Read more

  • Abel Ferrara’s hotly awaited DSK film to premiere on web

    Read more

  • World honours Garcia Marquez’s magical literary legacy

    Read more

  • Ukraine: ‘One bloody incident could scupper Geneva deal’

    Read more

  • Top Hollande adviser resigns over conflict of interest accusation

    Read more

  • Indian election: Votes for sale

    Read more

  • West African Ebola outbreak caused by new strain of virus

    Read more

  • Astronomers discover Earth-like planet that could support life

    Read more

  • Video: Tensions remain high in Mariupol despite Geneva deal

    Read more

  • In Prijedor, survivors fight to keep memory alive

    Read more

  • Deadly avalanche strikes Everest in worst-ever disaster

    Read more

  • With a strong French presence, veterans and fresh faces, Cannes aims to please

    Read more

  • Russia and West agree on steps to ease Ukraine crisis

    Read more

  • Mob launches deadly attack on UN shelter for S. Sudan civilians

    Read more

  • Eurostar train mishap causes 'severe' delays

    Read more

  • Chelsea Clinton announces she's pregnant

    Read more

  • French troops free five aid workers kidnapped in Mali by Islamists

    Read more

  • In pictures: Iranian woman pardons son’s killer at the gallows

    Read more

  • After cup defeat, Spanish pundits read last rites for Barcelona

    Read more

  • India heads to polls in single largest day of voting

    Read more

Europe

Iceland voters reject plan to repay bank debt

©

Text by News Wires

Latest update : 2011-04-10

Voters in Iceland issued a resounding “no” in a referendum on whether to approve a renegotiated deal to compensate Britain and the Netherlands over the 2008 collapse of Icesave Bank, leaving the issue to be settled in court.

REUTERS - Iceland faces more economic uncertainty and a drawn-out European court case after its voters rejected for a second time a plan to repay $5 billion to Britain and the Netherlands from a bank crash.
 
The British and Dutch governments voiced disappointment with the result of Saturday's referendum, in which almost 60 percent of voters opposed the repayment deal.
 
"We must do all we can to prevent political and economic chaos as a result of this outcome," Prime Minister Johanna Sigurdardottir told state television.
 
The issue will now be settled by the court of the EFTA Surveillance Authority (ESA), the European trade body overseeing Iceland's cooperation with the European Union.
"My estimate is that the process will take a year, a year and a half at least, Finance Minister Steingrimur Sigfusson told a news conference.
 
The debt was incurred when Britain and the Netherlands compensated their nationals who lost savings in online "Icesave" accounts owned by Landsbanki, one of three overextended Icelandic banks that collapsed in late 2008, triggering an economic meltdown in the country of 320,000 people.
 
Economists have said failure to resolve the issue means Iceland faces delays ending currency controls, boosting investment and returning to financial markets for funding.
 
But the centre-left coalition government said it would not resign despite the defeat.
 
"The government will emphasize maintaining economic and financial stability in Iceland and continuing along the path of reconstruction which it began following the economic collapse of 2008," it said in a statement.
 
It said a fresh round of talks on further funding from the International Monetary Fund, which led a bailout for the island, would be delayed several weeks, but that it had enough foreign exchange reserves to cover debts maturing this year and next.
 
Court case ahead
 
The proposed deal at issue in Saturday's vote set a clear timetable for repaying the Dutch and the British, including interest. But voters rejected the idea that taxpayers should foot the bill for what they see as bankers' irresponsibility.
 
"I know this will probably hurt us internationally, but it is worth taking a stance," Thorgerdun Asgeirsdottir, a 28-year-old barista, said after casting a "no" vote.
 
Dutch Finance Minister Jan Kees de Jager said: "This is not good for Iceland, nor for the Netherlands. The time for negotiations is over. Iceland remains obliged to repay. The issue is now for the courts to decide."
 
Economists have said the court route could be much costlier.
 
The government still hopes most of the debt will eventually be paid back from the estate of the bankrupt Landsbanki. Ratings agencies were following the vote closely. Moody's had said it might lower Iceland's rating in case of a 'no'.
 
Standard & Poor's analyst Eileen Zhang said a 'no' vote "might possibly result in a lengthy legal process and further uncertainties regarding the ultimate fiscal cost".

Date created : 2011-04-10

  • ICELAND

    President's veto of Icesave repayments bill sparks outrage

    Read more

  • ICELAND

    President calls for new referendum on repaying Icesave funds

    Read more

  • ICELAND

    Parliamentary report says former PM should be tried for 2008 banking collapse

    Read more

Comments

COMMENT(S)