From The BBC: http://www.bbc.co.uk/news/world-europe-13022524
10 April 2011
Icelanders have rejected the latest plan to repay the UK and Netherlands some 4bn euros lost when the country’s banking system collapsed in 2008.
Partial referendum results show 58% voting no, and 42% supporting the plan.
Johanna Sigurdardottir, Iceland’s Prime Minister, said the rejection meant “the worst option was chosen”.
UK Treasury minister Danny Alexander said the decision was “disappointing” and the matter would go to an international court.
Dutch Finance minister Jan Kees de Jager said he would be consulting Britain about taking further steps against Iceland, but added that the matter would likely end up in court.
“I am very disappointed that the Icesave agreement did not get through. This is not good for Iceland, nor for the Netherlands.
“The time for negotiations is over. Iceland remains obliged to repay. The issue is now for the courts to decide,” Mr de Jager said in a statement.
It is the second time a referendum has rejected a repayment deal.
Iceland’s Landsbanki bank ran savings accounts in the UK and Netherlands under the name Icesave and investors there lost 4bn euros (£3.5bn; $5.8bn).
Joe Lynam BBC News
The Icelandic people were damned if they did and damned if they didn’t. It looks as if they still couldn’t stomach the idea of paying off the debts of privately owned banks – even if the revised deal was considerably more generous.
The consequences of this referendum vote is that Iceland’s years in the financial wilderness could be extended much further.
Moody’s and other ratings agencies look set to downgrade the country even further, making it prohibitively more expensive to borrow on the open markets.
Iceland’s bid to join the EU will be paused or even vetoed by Britain and the Netherlands. And the tiny Atlantic economy is facing legal action in the EFTA court which might force it to pay up sooner than planned and at a punitive interest rate.
Democracy doesn’t pay if you’re an Icelander.
Complete Article at: http://www.bbc.co.uk/news/world-europe-13022524