Pent-up fury drives debt referendum in Iceland
Across their rugged island, Icelanders are preparing this weekend to reject a deal supposed to end the bitter Icesave dispute between Reykjavik and London.
About 75 per cent of Iceland is expected to vote “no” in an emotionally charged referendum to be held tomorrow. Despite last-minute negotiations with the UK and the Dutch finance ministry, the referendum looks a lost cause.
At stake is a relatively small sum for Britain that is seen as a crippling imposition by Icelanders. Icesave was a high-interest-paying online bank that attracted 229,000 British investors. It failed in the meltdown of October 2008 and exposed the weakness of European cross-border banking rules. As a part of the Icelandic Landsbanki operating in Britain and the Netherlands, it was subject to Icelandic regulation, but Iceland had no resources to compensate foreign clients when it collapsed. more