Tags: Iceland | US | UK | payback

Iceland Says No $5.3 Bln Payback to EU, UK

Sunday, 07 Mar 2010 10:09 PM


Icelanders roundly rejected a deal to repay the U.K. and the Netherlands €3.9 billion ($5.3 billion) lost in the collapse of an Icelandic Internet bank, complicating the island's bid to access badly needed international-aid funding and render normal its relations with the rest of the world.

More than 93% of Icelanders voted no in a national referendum last weekend, according to preliminary figures published Sunday morning by state broadcaster RUV. It was Iceland's first plebiscite since the island's independence from Denmark in 1944.

Final numbers were expected later Sunday, but they are unlikely to change substantially. Officials are awaiting ballots from remote regions of the island, RUV said.

The huge margin of defeat--pre-election polls had suggested a loud rejection by around three-quarters of voters, but not a thrashing of more than 90%--will make it harder for Iceland's politicians to cede ground in ongoing negotiations with the British and the Dutch.

The government of Prime Minister Jóhanna Sigurdardóttir has labored for the better part of a year to get a bill through a hesitant Parliament, arguing that Iceland desperately needs money set aside under an International Monetary Fund-led bailout of the country. Much of those funds are effectively on hold until a payback deal is reached, as is Iceland's application to join the European Union.

Seeing early the signs of impending defeat, Ms. Sigurdardóttir and other political leaders—all the political parties back some form of repayment—had pushed to reach a new accord with Britain and the Netherlands in recent weeks, hoping to make the referendum pointless. After those talks ended Friday with no resolution, Ms. Sigurdardóttir even encouraged citizens not to vote, hoping to blunt the referendum's effect with low turnout.

"This result is no surprise," Ms. Sigurdardóttir said Saturday, according to the Associated Press. "Now we need to get on with the task in front of us, namely to finish the negotiations with the Dutch and the British."

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2010-09-07
Sunday, 07 Mar 2010 10:09 PM
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