Iceland’s government is desperately trying to reach a last minute debt-repayment deal with Britain and the Netherlands ahead of Saturday’s crucial referendum.
Angry Icelanders are widely expected to reject the current agreement. Latest polls say 74 percent plan to say “no”, but rejection of the deal could freeze foreign aid needed to resuscitate the country’s shattered economy.
The government intends to keep on talking right up to the last minute to win softer terms.
Prime Minister Johanna Sigurdardottir said:
“ What I am saying is that we have to evaluate the situation. What happens today and tomorrow decides whether we will have something tangible in hand. If that is the case we have to evaluate whether this referendum should go ahead.”
Iceland owes the governments of Britain and the Netherlands around 3.8 billion euros after they compensated over 340,000 savers in their own countries. They’d lost money in Icelandic deposit accounts back in 2008.
The bank at the centre of the crisis is online Icesave. The two states want the debts settled before funds from the International Monetary Fund can resume.
To cancel the ballot, Iceland’s government needs to strike a new deal and to get opposition parties on board.