The clock is now ticking for Iceland to decide how it will repay a massive debt to Britain and the Netherlands. Parliament has set a March 6 deadline for a public referendum on a bill fixing terms for repayment.
Iceland owes 3.8 billion euros for savings lost when its banks collapsed in 2008. The matter went to the referendum stage after the president refused to sign the unpopular repayment bill earlier this week.
But with the country still in the throes of a devastating recession, the government does not want to jeopardise the flow of aid from Europe.
Many Icelanders are against offering an open-ended guarantee, believing their banks’ mistakes have saddled the public with crippling debts.
But others acknowledge that failure to back the repayment bill could prolong the nation’s economic misery.