Saturday, March 6, 2010

Icelanders To Vote On Paying Back UK

Icelanders To Vote On Paying Back UK

Icelanders are expected to say an emphatic "No" in a vote on whether to repay the UK and Dutch governments £3.5bn as part of the Icesave compensation deal.

British and Dutch online savers lost their money after Landsbanki and its internet banking scheme Icesave went bust in 2008.

The savers were compensated by their respective governments but the British and Dutch treasuries have demanded they get the cash back from Iceland.

A deal had been negotiated and approved by Iceland's parliament but President Olafur Ragnar Grimsson rejected it, triggering a referendum.

Polls suggest 75% of Icelanders think the Icesave compensation deal - which was negotiated by the British and the Dutch - is unfair.

If Iceland did pay it would mean each of its 320,000 citizens would be stung for more than £10,000.

With Iceland badly hit by the financial crisis a 'No' vote in the referendum is inevitable.

Many of Iceland's politicians believe the country is being bullied by two larger countries - a sentiment which strikes a chord with the public.

Green Party MP Ogmundur Jonasson thinks it is a bad deal for his country.

"It is an unfair deal for Iceland. It is... well unilaterally on the terms of the British and the Dutch governments who've had their help from their friends in the European Union and the IMF."

But a 'no' vote would anger the British and the Dutch.

City minister Lord Myners said Iceland would be expelled from the global financial system if it did not fulfil its responsibilities.

Both governments say they will block Iceland's entry into the EU if the country does not stump up the cash.

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