Government bill for a national referendum on Icesave legislation

Iceland's coat of arms(Press release from Icelandic Prime Minister’s office)

The Icelandic Parliament, Althingi, convened today to debate a Government bill regarding the preparation for a national referendum on the so-called Icesave legislation. This comes in the wake of the President of Iceland´s decision on 5 January not to sign into law a bill which provides for a state guarantee of loan repayments to the British and Dutch governments. According to Article 26 of the Constitution, a national referendum must take place should the President not sign a bill into law.  

Prime Minister Johanna Sigurdardottir emphasized to Parliament the importance of respecting the Constitution, adding that all political parties agree that national referendum should take place as soon as possible.

“The draft law is simple and without restrictions. I am confident that the majority of eligible voters will make up their minds and participate in the referendum. I have full trust in the Icelandic voters and know that they will make the right decision. The government will prepare a vote and inform voters carefully, and by that bring the Icesave issue to a close. This is necessary to continue the ongoing economic recovery in Iceland”, she stated during the parliamentary debate.

The draft law before Parliament states that a national referendum should take place no later than Saturday 6 March 2010. The government suggests that the vote should take place on 20 or 27 February, or 6 March, 2010.

Despite the President´s decision not to sign the bill it nevertheless enters into law and remains in force unless rejected in a national referendum.

The Icelandic Government has clearly stated its intention to honor its international obligations and remains fully committed to implementing the bilateral loan agreements with the UK and the Netherlands and thus the state guarantee provided for by the law. Iceland has been in close contact with the Governments of the UK and the Netherlands, other partner countries and the EU and the IMF, to inform counterparties about the latest developments and explain the process triggered by the decision announced by the President on Tuesday.

Reykjavik 8 January 2010

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