Iceland Votes to Not Pay Debt

Iceland is full of welshers. 

Iceland’s voters overwhelmingly rejected a deal to pay billions of dollars it owes to the United Kingdom and the Netherlands, the Foreign Ministry said Sunday.

With around 90 percent of votes counted, just over 93 percent said no and just under 2 percent said yes. Not enough votes remain to be counted to change the result. Some 62.5 percent of Iceland’s roughly 200,000 register voters cast ballots, the ministry said.

The referendum was on a law about repaying the Netherlands and UK, which helped savers in their own countries who lost money in a failed Icelandic Internet bank.

The British and Dutch governments came up with more than $5 billion for bailing out people who lost money in Icesave—an online retail bank branch of Landsbanki. That Icelandic bank failed in October 2008, along with two other banks in the country.

Under a European Union directive, Iceland now owes compensation to Britain and the Netherlands. The Icelandic government has said it will honor its international obligations.

Iceland’s parliament passed a bill authorizing a state guarantee for repayment of the funds, but President Olafur Ragnar Grimsson declined to sign it in January. He cited public disapproval, and in particular, an Internet petition signed by up to one-quarter of the electorate, as a reason for not signing the bill. He said there needed to be a national consensus in addressing the issue.

That prompted Saturday’s national referendum on the law.