The people of Iceland are being asked today whether or not to support a deal to pay back billions of euros to the British and Dutch governments.
Polls suggest they are almost certain to say ‘no.’
The 3.8-billion euro debt results from the collapse of Iceland’s Icesave bank in 2008, when Britain and the Netherlands reimbursed their citizens who were Icesave customers.
Icelandic prime minister Johanna Sigurdottir has blamed the EU’s regulatory system for the collapse but promised the country would honour its debts and has never and would never beg for anything.
Icelanders are expected to use the referendum to vent their anger at having to pay for the mistakes of politicians and bankers. The repayment deal that they are voting on was struck late last year but proved hugely unpopular among Icelandic taxpayers, who are holding out for a fairer one.
As one Reykjavik resident put it:
“We know that we have to pay. We don’t want to pay, but we know that we have to. We just want to get a better deal, just like everyone else.”
The deal being voted on has since been changed during talks between the three governments concerned. Britain and the Netherlands have already offered easier repayment terms, giving Icelanders little incentive to support the old, outdated agreement in the referendum.
Talks have stalled but there remains hope that a new deal to pay back the debt will be reached. Iceland’s foreign minister has said he believes this could happen within weeks or even sooner. An agreement would allow Iceland to finally get access to billions of euros of loans from the International Monetary Fund.
Iceland votes on whether to repay debt