UK and Netherlands to sue Iceland over debt

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UK and Netherlands to sue Iceland over debt

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Britain and the Netherlands are planning to sue Iceland after the country’s voters rejected for a second time a repayment plan agreed when the country’s banking system crashed.

The UK’s Chief Secretary to the Treasury, Danny Alexander, said the weekend’s referendum result meant the process would probably end up in the courts.

British and Dutch nationals were bailed out by their own governments after losing four billion euros in accounts owned by one of three Icelandic banks that collapsed in 2008.

Iceland is worried by suggestions that the ‘no’ vote may damage its bid to join the EU.

“As regards the EU application, I don’t see that there should be any connection at all. That is a totally separate process,” said Steingrimur Sigfusson, Iceland’s Finance Minister.

Iceland’s government says it is disappointed by the result but will not resign.

60 percent of voters rejected the repayment deal even though terms had improved.

Economists say dealing with Iceland’s financial problems could now be more difficult.