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Resounding 'no' expected in Icesave referendum

Icelanders are voting Saturday in a referendum on a proposed $5 billion deal to repay British and Dutch loans. Voters are expected to vote "no" in overwhelming numbers, which will likely delay further foreign aid and hopes for economic recovery.

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AFP - Iceland polling stations opened Saturday for a referendum on a hugely unpopular bank collapse repayment deal for Britain and the Netherlands, with surveys and even the government saying a no vote is inevitable.

First results were expected to start trickling in shortly after polling stations close at 2200 GMT, with final results later the same night.

At stake is the question of whether Iceland should honour an agreement to repay Britain and the Netherlands 3.9 billion euros (5.3 billion dollars).

This would be to compensate them for money they paid to 340,000 of their citizens hit by the October 2008 collapse of Icesave online bank.

According to the latest opinion poll, three quarters of voters will vote to spurn the agreement, which was passed by parliament in late December.

It went to a referendum after President Olafur Ragnar Grimsson refused to sign it into law because of the public opposition.

A demonstration against the deal being voted on was scheduled in front of parliament for 1400 GMT.

The expected no vote is not without risks.

Observers caution that an Icelandic refusal to repay their Icesave debt could block an International Monetary Fund rescue package, as well as European Union and euro currency membership talks.

It could also push Iceland's credit rating over the cliff and destabilise the leftwing government, which negotiated the agreement in the first place.

Reykjavik had been negotiating with London and The Hague for weeks to avert the plebiscite, but the talks adjourned Friday without a new agreement on the table.

Paradoxically, the government had received and rejected a more favourable deal than the one Icelanders are being asked to vote on. But Iceland's leaders said they would resume talks after Saturday's referendum.

Prime Minister Johanna Sigurdardottir went so far Friday as to call the referendum "meaningless," saying she saw no reason to go to the ballot box.

 

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