Iceland Rejects Repayment

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A staggering majority of the Icelandic population have rejected proposals to pay back the UK and Netherlands for money borrowed in the wake of collapse of the bank Icesave.

After a third of the results of the public referendum were counted, it has been revealed that 93% have voted ‘no’, whilst less than 2% of those voting supported the deal.

Britain and the Netherlands want reimbursment for the £3.4bn they paid out in compensation to the customers of Icesave, an online savings bank, which was placed into recievership in 2008. The bank had customers in both countries as well as in Iceland, with 300,000 Britons alone with registered accounts.

In December 2009 the Althing, the Icelandic national parliament, narrowly (33-30) passed a version of the Icesave bill amended to meet British and Dutch compensation demands. The bill would make it possible for the two governments to recoup the money lost by customers of Icesave, and ensured they would receive payments over the period of the next 14 years.

However there was a strong national reaction to this bill, as 23% of the voting population of Iceland petitioned the government to take the deal to a public referendum.

The feeling of Icelanders is that they are being made culpable for the actions of a small number of people in the financial industry. There is also a great deal of public anger towards the reaction of the UK government at the time of the collapse, who used anti-terrorist legislation in order to freeze Icesave assets in the country.

President Grimsson responded to the petition by blocking the repayment bill, and calling a referndum, the first results of which have been released this morning showing on overwhelming lack of support. It was hoped by Icelandic government officials that it could be avoided by coming to a new agreement prior to this weekend, but talks broke down before the public vote took place.

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