Thursday

22nd Aug 2019

Iceland voters reject Icesave deal for a second time

  • Young people sitting next to a mural in the Icelandic capital (Photo: European Commission)

Iceland's bitter row with the Netherlands and the UK over the loss of billions of depositors' money in a collapsed online bank has reached a new stage after Icelandic voters on Saturday rejected for the second time a deal to resolve the issue.

Icelanders voted by 60 percent against a deal that reduced the interest rate demanded by the Hague and London from 5.5 percent down to 3.2 percent.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

However, a majority of voters felt that even this was unfair, and have flatly refused to use any public cash to pay for the mistakes of the financial sector.

After the Icelandic Icesave internet bank collapsed in the wake of the global economic crisis in 2008, depositers in the UK and the Netherlands were compensated by their governments to the tune of €3.8 billion. The Hague and London then demanded Reykjavik pay them back.

The government had agreed to do so in an earlier deal, but the terms were considered onerous by a majority of the population. Under the terms of the original agreement, the loan would have been paid back over 15 years with high rates of interest. Estimates had suggested every household would have to contribute around €45,000.

The president of the country had refused to sign the government bill that approved a schedule of payments to the two governments, provoking a referendum on the matter in March 2010 that saw the earlier deal rejected by 91 percent of Icelanders.

President Olafur Ragnar Grimsson also refused to sign the second agreement, again triggering a referendum.

He hailed the outcome, saying: "The leaders of other states and international institutions will have to respect this expression of the national will."

But ministers from the Netherlands and Britain were in a less celebratory mood, saying they will conclude the dispute via the courts.

"The time for negotiations is over," said the Dutch finance minister, Jan Kees de Jager.

The UK's secretary to the treasury, Danny Alexander, told the BBC: "There is a legal process going on and we will carry on through these processes to try and make sure we do get back the money that the British government paid out in past years."

The European Free Trade Area Surveillance Authority, an organisation with a similar role to that of the European Commission, but for those EFTA countries in the European Economic Area, has already launched legal action against Reykjavik.

"I fear a court case very much," Icelandic Prime Minister Johanna Sigurdardottir said after the result became known.

However, the government, currently in the middle of an application to join the European Union, also reckons it can pay some 90 percent of the money owed from the sale of assets of Icesave's collapsed parent bank, Landsbanki.

Exclusive

Brexit row delays financial products transparency review

A European financial regulatory body set up after the financial crisis is at loggerheads with the European Commission over whether to carry out a transparency review of certain financial products. The reason: Brexit.

Commission defends Mercosur trade deal

EU commissioners defended a far-reaching free trade agreement between the EU and four Latin American countries, against critics who fear it will damage European farmers' livelihoods and the global environment.

EU hesitates to back France over US tariff threat

France has passed a new tax on tech companies that will affect US global giants like Facebook. Donald Trump has threatened retaliatory tariffs over it. The EU commission says it will "coordinate closely with French" on the next steps.

EU banks more vulnerable to shocks than feared

Eurozone banks, such as Deutsche Bank, might be much more vulnerable to a repeat of the 2008 financial crisis than EU "stress-tests" have said, according to a new audit.

Opinion

Why von der Leyen must put rights at core of business

Ursula von der Leyen's in-tray must include those European executives on trial for systematic workplace harassment, the break-up of European slavery rings, and allegations of European companies' abuse in palm oil, including child labour, land grabs, and deforestation.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. Open Arms may face fine in Spain 
  2. Belgium's EU commission hopeful in free press row
  3. Conte turns on Salvini, as Italy prepares for change
  4. Nordic-German climate action signals broader alliance
  5. The EU committee's great 'per diem' charade
  6. Spain calls for legal action against Italy on migrants
  7. Trump to meet Greenland leader in Denmark
  8. Irish border plan is 'anti-democratic', Johnson tells EU

Join EUobserver

Support quality EU news

Join us