Iceland rejects debt repayment plan

Sun Apr 10, 2011

Voters in Iceland have rejected the latest plan to repay EUR 3.9 billion (USD 5.6 billion) worth of deposits in a failed online bank to The Netherlands and UK.

Partial results of a national poll show that 57 percent of Icelanders voted against the plan on Sunday. British and Dutch governments had compensated some 400,000 citizens who lost their savings when Iceland's Landsbanki (Icesave) collapsed in 2008, AFP reported.

The Netherlands and Britain expressed dissatisfaction, and said they are prepared to bring the dispute to the European Free Trade Association court.

Icelandic lawmakers in February backed a repayment plan they had worked on for more than two years. It had been agreed upon by creditors, but the president refused to sign the bill, leading to the referendum.

The agreement would have allowed Iceland to gradually repay its debt at a 3.0 percent interest rate for the EUR 1.3 billion it owes to The Netherlands and the remainder at a 3.3 percent interest rate to Britain until the year 2046.

The amount to be repaid by the Icelandic citizens was calculated to be around EUR 12,000 per person before interest, for a nation with a population of 320,000.

Iceland's Finance Minister Steingrimur Sigfusson said the voters' decision would not affect the country's existing debt repayments nor would it derail its efforts for membership in the European Union.

A previous repayment deal was also rejected by a 93 percent majority in another referendum last year.

Source: PressTV.
Link: http://www.presstv.ir/detail/174121.html.