Iceland plea
January 4, 2010
Icelandic voters have called on their president to veto a parliamentary bill to pay off a 3.8 billion euro ($5.4 billion) banking debt.
About a quarter of the electorate has signed a petition asking President Olafur Ragnar Grimsson to hold a referendum on the matter.
Under the terms of the compensation plan Iceland would have to repay 3.8 billion euros, or 12,500 euros per citizen, of the money lost when the island nation's banking system collapsed.
The money would reimburse Britain and the Netherlands for the amount that savers in both countries lost when the online bank Icesave, part of the Landsbanki group, failed. Investors in both countries received partial compensation from their national governments.
Pressure from parliament
President Grimsson is under pressure from parliament to approve the plan, which was approved Wednesday by a 33-30 vote. According to InDefence, the group that organized the petition, over 61,000 people had signed the petition as of Sunday asking Grimsson not to sign the legislation into law.
"I consider it to be a reasonable demand that the economic burden placed on the current and future generations of Icelanders - in the form of a state guarantee for Icesave payments to the UK and Dutch governments - be subject to a national referendum," the petition reads.
"Law is huge risk"
InDefence said the legislation represented a "huge risk."
"All projections based on realistic assumptions… showed without doubt that Iceland would be unable to meet the payments stipulated by the Icesave loan agreements as set out in the disputed legislation," it said in a statement.
Compliance with the compensation plan - with repayments being made over a 14-year period - has been seen as vital for Iceland in its efforts to join the European Union. Reykjavik applied for membership in July after it was plunged into recession by the banking collapse.
The Icelandic government was also forced to seek emergency loans from the International Monetary Fund and European neighbors.
An earlier compensation deal in August had to be revised when the British and Dutch governments opposed amendments to it.
rc/Reuters/dpa
Editor: Nancy Isenson