Iceland’s voters expressed their outrage on Saturday against bankers, the government and what they saw as foreign bullying, overwhelmingly rejecting a plan to pay $5.3 billion to Britain and the Netherlands to reimburse customers of a failed Icelandic bank, Sarah Lyall reported in The New York Times.
With about 98 percent of the votes counted Sunday, roughly 93 percent of voters said no to the plan, in the first public referendum ever held on any subject in Iceland. Less than 2 percent voted yes, and the rest of the votes were invalid.
But the referendum was more symbolic than substantive, and the Icelandic government hastened to make clear that Iceland would still pay back the money, albeit on different terms from the ones rejected.
“We want to be perfectly clear that a ‘no’ vote does not mean we are refusing to pay,” Finance Minister Steingrimur Sigfusson said. “We will honor our obligations. To maintain anything else is highly dangerous for the economy of this country.”
In the Netherlands, Finance Minister Jan Kees de Jager said Saturday, as the first results were being reported, that Iceland’s referendum was an “internal matter,” the Dutch news service ANP reported.
Still, Mr. Jager noted that no agreement was operative yet for the repayment. He said in a letter to his Icelandic counterpart that Britain and the Netherlands were committed to “finding a solution in line with international standards,” the news service reported.
International standards may have more importance for Iceland than other countries, as it was invited last month to begin accession talks with the European Union.
“I consider accession talks to be an extra tool to force Iceland to come to an agreement,” the Dutch foreign minister, Maxime Verhagen, told ANP on Saturday.
Icelandic officials have already accused Britain and the Netherlands of slowing financial aid from the International Monetary Fund to put pressure on Reykjavik.
The vote Sunday shows the depth of Icelanders’ rage. They are angry at the British and Dutch, who they say are mistreating them; angry at the regulators and government officials who failed to properly oversee the Icelandic financial system; and angry at the bankers whose recklessness helped the economy grow at a headspinning rate and then caused it to self-destruct in days.
“Ordinary people, farmers and fishermen, taxpayers, doctors, nurses, teachers, are being asked to shoulder through their taxes a burden that was created by irresponsible greedy bankers,” President Olafur Ragnar Grimsson said on Bloomberg Television.
How to repay the debt, which represents more than 40 percent of Iceland’s gross domestic product, has consumed this small, isolated nation for the last year and a half, since its banks failed, its stock market crashed and its currency collapsed.
The money represents a portion of the losses incurred by more than 300,000 Dutch and British customers of Icesave, an Internet branch of the Icelandic bank Landsbanki. The bank went bankrupt in October 2008, along with 85 percent of Iceland’s banking sector. The Netherlands and the British reimbursed their citizens, and are now pushing to get the money back from Iceland.
The three countries have been fighting over the deal’s terms ever since. An agreement this fall that would have given Iceland 15 years to pay the money, at 5.5 percent interest, only narrowly passed the country’s Parliament.
But on Jan. 5, Mr. Grimsson unexpectedly refused to sign the bill into law, setting off the need for a nationwide referendum.
But the vote has been overtaken by events, the government said: the deal at issue in the referendum is no longer the deal that is currently on the table in international negotiations.
Each day of delay increases Iceland’s financial burden. The second installment of a much-needed loan from the International Monetary Fund and a coalition of Nordic countries has been put off pending resolution of the dispute.
Britain has warned Iceland that it risks being an international pariah if it does not pay the money back and has threatened to stall the country’s efforts to join the European Union.
The Icesave matter has put increasing pressure on the year-old Icelandic government, a fragile coalition led by Johanna Sigurdardottir of the Social Democratic Party. On the one hand, it needs to show that it acknowledges the public’s deep bitterness; on the other, it needs to negotiate a deal quickly in order to move economic recovery along.
“We need to keep going,” Ms. Sigurdardottir said in a television interview. “We have to get an agreement.”
Go to Article from The New York Times »
Go to Article from ANP via De Limburger Dagblad (in Dutch) »
Go to Article from ANP via Beursduivel (in Dutch) »
Go to Article from Het Financieele Dagblad (in Dutch) »
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