The collapse of our banks and the difficulties following in the wake of the world economic crisis have created profound difficulties. Although the Icelandic state has undertaken various liabilities of a magnitude greater than those involved in the Icesave case, the debate on this case has become the focus regarding how we deal with the challenge of the past and also of the future.
The Althingi has now again passed legislation on this matter. This
amends the current law, the Act No. 96/2009, which the Althingi passed
on 28 August and which was based on agreements with the Governments
of the United Kingdom and the Netherlands. The President approved that
Act on 2 September, with a reference to a special statement.
Following the passing by the Althingi of the new Act on 30
December, the President has received a petition, signed by about a quarter
of the electorate, calling for the Act to be subjected to a referendum. This
is a far larger proportion of the electorate than the criterion that has been
referred to in declarations and proposals from the political parties.
Public opinion polls indicate that the overwhelming majority of the
nation is of the same opinion. In addition, declarations made in the
Althingi and appeals that the President has received from individual
Members of Parliament indicate that the majority of the Members are in
favour of holding such a referendum.
Since the new Act was passed by the Althingi, the President has had
extensive discussions with Ministers in the Government of Iceland: the
Prime Minister, the Minister of Finance, the Minister for Foreign Affairs
and the Minister of Economic Affairs.
It is the cornerstone of the constitutional structure of the Republic of
Iceland that the people are the supreme judge of the validity of the law.
Under the Constitution, which was passed on the foundation of the
Republic in 1944, and which over 90% of the nation approved in a
referendum, the power which formerly rested with the Althingi and the
King was transferred to the people. It is then the responsibility of the
President of the Republic to ensure that the nation can exercise this right.
At this crucial juncture it is also important to emphasise that the
recovery of the Icelandic economy is a matter of vital urgency. Clearly,
agreement with other nations and good cooperation with international
organizations and all other parties that have an influence on the country’s
economy and financial standing are preconditions for this recovery. The
solution of the Icesave dispute is a part of such a harmonious process. It is
also a prerequisite for the nation to be able to regain its former strength as
soon as possible and embark, in collaboration with others, on a
programme of recovery which will secure the welfare and prosperity of
all people in Iceland. In the President’s declaration of 2 September 2009,
it was stated that the solution would have to “take account of the fair
rights of the nation, Iceland’s interests in the years ahead and a shared
It has steadily become more apparent that the people must be
convinced that they themselves determine the future course. The
involvement of the whole nation in the final decision is therefore the
prerequisite for a successful solution, reconciliation and recovery.
In the light of all the aforesaid, I have decided, according to Article
26 of the Constitution, to refer this new Act to the people. As stated in the
Constitution, the new Act will nevertheless become law and the
referendum will take place “as soon as possible.”
If the Act is approved in the referendum then naturally it will remain
in force. If the referendum goes the other way, then the Act No. 96/2009,
which the Althingi passed on 28 August, on the basis of the agreement
with the Governments of the United Kingdom and the Netherlands, will
continue to be law, recognizing that the people of Iceland acknowledge
their obligations. That Act was passed by the Althingi with the
involvement of four of the parliamentary parties, as stated in the
President’s declaration of 2 September.
Now the people have the power and the responsibility in their hands.
It is my sincere hope that this decision will lead to permanent
reconciliation and prosperity for the people of Iceland, at the same time
laying the foundations for good relations with all other nations.
Bessastaðir, 5 January 2010
Ólafur Ragnar Grímsson