Icelanders set to reject debt repayment

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Icelanders set to reject debt repayment

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The people of Iceland are today widely expected to vote against a deal to pay back debt to Britain and the Netherlands.

The money has been owed since the country’s Icesave bank collapsed in 2008 at the height of the financial crisis, and British and Dutch customers were reimbursed by their governments. Those governments now want their money back.

Under a deal struck last year, some 3.9 billion euros will be paid back over the next 14 years, at an estimated cost of 100 euros per person per month for the next eight years. Icelandic taxpayers believe these terms are unfair and are angry at having to pay for their bankers’ mistakes.

Casting her ballot in the referendum, one voter said:

“I think we are better off to say no to this and try to get a decent agreement with these nations. And I think we all agree that we want to do our deed, we want to be responsible and play our part. But we want to do it without going bankrupt for the future to come.”

The referendum became necessary after the Icelandic president, Olafur Ragnar Grimsson, refused to sign up to the repayment bill passed by parliament.

None of Iceland’s political parties are backing the deal, which is now outdated as the British and Dutch governments have since tabled easier terms than those being voted on today. Icelanders therefore have little incentive to vote ‘yes.’

The three countries are still working on a new repayment scheme, which Iceland needs to be allowed access to IMF loans to help it emerge from recession.

The Dutch government has also warned it will take the issue into account when discussing Iceland’s application to join the European Union.