Icelanders to vote on Icesave compensation

by Gill Montia

Story link: Icelanders to vote on Icesave compensation

Icelanders are to vote on whether to pay £3.1 billion in compensation to authorities in the UK and the Netherlands.

The debt relates to the collapse of Landsbanki in October of 2008, which left over 300,000 British savers with the bank’s Icesave brand with their accounts frozen.

Last week, the Icelandic parliament passed a bill authorising payment of the compensation, but by only three votes.

President Olafur Ragnar Grimsson has since received a petition, signed by almost one quarter of Iceland’s voters, calling for a referendum on the issue.

He has agreed to their demands, operating a presidential veto for only the second time in Iceland’s history.

At the time of the Landsbanki crisis, the UK Treasury stepped in with a 100% guarantee for individual savers at a cost of £2.35 billion to the British taxpayer.

However, Icelanders are arguing that they are being penalised for the mistakes of the country’s banks.

A date for a referendum will be set as soon as possible but in the meantime, news of the veto will do nothing for Iceland’s international reputation or its hopes of joining the EU.