Iceland votes against Icesave payback plans
The majority of Icelandic voters polled on whether or not to pay back the £3.5 billion owed to Britain and the Netherlands following the collapse of the Icesave bank have rejected the plan. Icelandic public television claims that the turnout for the ballot was around 55 percent. The rejection of the referendum follows last weeks break down in talks on how best to rectify the situation.
Johanna Siggurdardottir, Iceland’s Prime Minister said the result of the referendum had not come as much of a surprise. 93 percent of the people who cast ballots voted against the compensation deal. However the Icelandic government still believes that some sort of deal can be achieved and it is believed that the UK has offered more favourable options including a cut in the original interest rates.
Under the initial plans it would cost each taxpayer around £90 per month payable for a period of eight years. At the moment Iceland has an unemployment rate of nine percent and its shrinking economy is trying to cope with an annual inflation rate of seven percent. Many taxpayers say that they simply cannot afford to help pay back the British government.
However if a deal cannot be struck Iceland may find it difficult to secure the investment it so desperately needs to repair its ailing economy. The non repayment may cause the country’s credit rating to be downgraded. Protesters have also gathered in Reykjavik calling for more say in the plans. In a statement the government said that it still feels an agreement that suits all parties will eventually be arrived at.
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Assets will cover 85-90% of the debt. The £90 per person is something Icelanders would certainly want you to believe - but it is a ridiculous claim.