Icelanders vote against Icesave compensation deal

by Gill Montia

Story link: Icelanders vote against Icesave compensation deal

The Icelandic government’s plans to repay a total £3.5 billion to authorities in the UK and the Netherlands have met with a decisive “No”.

The debt, which relates to the collapse of Landsbanki’s online savings brand, Icesave, equates to around €12,000 per Icelander.

Results so far from a referendum on the compensation deal indicate that 93% of voters are opposed to the plans.

Despite the referendum having come and gone, negotiations are still taking place between Iceland, the UK and the Netherlands, over the terms of the repayment.

Icelanders have protested at the interest rates set under the original agreement and it is understood that these could be revised in the debtor’s favour.

Failure to repay the money would jeopardise Iceland’s bid to join the EEC, damage the country’s wider international reputation and could affect its sovereign credit rating.

Meanwhile, Iceland’s economy appears to be bouncing back from near melt down with a 3.3% rise in gross domestic product in the fourth quarter of 2009 compared with the previous three months, The Times has reported.