8th Dec 2021

UK open to fresh talks after Iceland referendum, Netherlands more wary

  • PM Sigurdardottir did not vote in the referendum (Photo: Magnus Fröderberg/

Following Saturday's referendum in Iceland in which 93.5 percent of voters voted No to plans to reimburse the Netherlands and the UK for monies lost following the collapse of online bank Icesave, there has been a mixed reaction on the part of the two EU governments.

London has said it is open to fresh talks on the matter while the Hague has warned explicitly that the vote threatens the north Atlantic nation's EU hopes.

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With an overall turnout of 62.7 percent of registered voters, 94 percent vote no while just 1.8 percent backed the deal. The remaining four percent and change came from spoilt ballots.

"Talks among the three governments for an alternative resolution of the Icesave issue, however, have already begun," said Icelandic foreign minister Ossur Skarphethinsson, referring to discussions that were suspended on Friday ahead of the vote.

"Negotiators have been meeting in London for the last three weeks for this purpose. These talks have been constructive and positive and the government of Iceland is confident that a solution acceptable to all parties can be achieved."

Indeed, UK chancellor Alistair Darling conceded that his government were open to further negotiations.

"It's not a matter of whether the sum should be paid. There is no question we will get the money back but what I am prepared to do is to talk to Iceland about the terms and conditions of the repayment," he told the BBC on Sunday.

Dutch foreign minister Maxime Verheugen however suggested the result undermined the country's application to join the European Union, saying it was "part of our considerations" as to whether to support the north Atlantic nation's bid.

Last month, the European Commission recommended the EU move ahead with accession talks, but it remains in the hands of the EU's existing member states whether to do so.

Ahead of the vote, there were concerns that the referendum could lead to the financial isolation of Iceland, risking loans from the International Monetary Fund and threatening the country's financial rating.

However, Reykjavik received a show of support from IMF chief Dominique Strauss-Kahn on Sunday, who said that the fund is "committed to help Iceland" and that the dispute between the country and the Netherlands and the was a "private" matter, suggesting it will not have an affect on the IMF delivering further tranches of aid to the country.

After the Icesave internet bank collapsed 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 now are demanding Reykjavik pay them back.

The government had agreed to do so, but the terms were considered onerous by a majority of the population. Under the terms of the agreement, the loan was be paid back over 15 years with interest, with estimates suggesting every household will have to contribute around €45,000.

Protest followed passage of the deal in parliament and the country's president to sign the government bill that approved a schedule of payments to the two governments, provoking a referendum on the matter.

Citizens were furious that the financial burden of a crisis caused by bankers would be borne by the people and their public services.

Following the No vote, government nevertheless said that the vote was not a plebicite on whether to pay back the €3.8 billion debt, but the terms of the previous deal and said talks on a better agreement would begin again immediately.

The vote is a heavy blow to the governing left wing coalition, but Prime Minister Sigurdardottir dismissed suggestions that it endangered her administration.

"This has no impact on the life of the government," she of the result.

"Now we need to get on with the task in front of us, namely to finish the negotiations with the Dutch and the British."

Prime Minister Johanna Sigurdardottir did not vote in the referendum.

Meanwhile, UK anti-Third-World debt campaigners, who have alongside their Dutch counterparts attacked their own governments as "bullies" over the issue, cheered the result, saying it gave inspiration to others around the world hobbled by "unjust or unpayable" debts.

"The current system only blames the borrower country – allowing lenders to squeeze the last drop of blood out of their debtors, whatever impact that has on the people who live in the debtor country," said Nick Dearden of Jubilee Debt campaign, which backs the creation of an international debt arbitration tribunal.

"Around the world, many countries still pay far more on servicing unjust debts than they do on health or education for their own people."


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