For the second time, Icelanders are today voting in a national referendum on whether to approve or deny a new deal aiming to pay back the British and Dutch governments for the money they spent bailing out customers of Landsbanki’s failed Icesave savings accounts.
This third version of the Icesave deal was passed by the Althingi parliament with a significant majority; however, President Olafur Ragnar Grimsson felt the bill was controversial enough to use his power to send law to a national referendum. Grimsson is the first president to have ever used this power; something he has now done three times.
Unlike the previous two deals (the second of which was also presented to the public in a referendum), there is little suggestion of taking Icesave back to the negotiating table. The deal on offer today is widely regarded to be the best possible mutually negotiated trilateral deal Iceland could hope for.
People voting ‘no’ today do so for a variety of reasons; one of which is the hope that the case will be pushed before the EFTA and/or Icelandic courts and that the sovereign guarantee will be nullified entirely, thereby cancelling the ‘debt’. Those voting ‘yes’ argue that all options are expensive — even saying no and the risk of losing in court and having to pay back instantly at market interest rates is dangerously high. They argue that accepting the deal is affordable and is the best option for Iceland’s reputation, creditworthiness and economic recovery.
Polls had shown a consistent desire to pass the deal today, but over recent weeks the ‘no’ camp has gained a lot of ground and very recent polls suggest the repayment deal will be cancelled by a small margin.
IceNews will cover the results as they come in this evening. Polling closes at 22.00 GMT.