Britain and the Netherlands are preparing court action against Iceland after Icelandic voters rejected a plan to repay the 3.9 billioin euros lost when the country’s bank system collapsed in 2008.
On Saturday nearly 60 per cent of people opposed a repayment deal.
Under the rejected deal, Iceland would have paid the money back with a 3 per cent interest to the Netherlands and 3.3 per cent to the UK over thirty years between 2016 and 2046.
On Sunday the president of Iceland stated the rate of interest was questioned not the debt.
Olafur Ragner Grimsson said:
“It is not the case that has all Britain and the Netherlands are not getting their money back often as they say. They will get huge amounts of money back even as I’ve said between 7.8 and 9 or 10 billion US dollars.
In October 2008 Iceland’s three main banks collapsed a few days of each other.
The institutions compensated Icelandic savers but overseas customers faced losing all of their money.
Icelands Landsbanki bank had savings accounts in the UK and the Netherlands under the name Icesave, which promised high interest rates.
It is the second agreement Icelandic voters have rejected.
In March 2010 93 per cent of people snubbed the plan to pay 5.5 per cent interest between 2016 and 2046.
Many Icelanders are suffering personal financial difficulties that have had devastating effects on their lives.
The Gardarsson family lost their home, unable to keep up their loan repayments.
“Its horrendous to go through this. I may have lost everyone of my family because of this, so no this is not a light matter for me,” said Olafur Gardarsson.
The No vote is expected to cause friction with Britain and the Netherlands and even increase the chances of the countries renouncing Iceland’s bid to join the EU.
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