Iceland government falls

[Jan Klimkowski]

The serfs revolt!

The good folk of Iceland may still be sold out, but it's a promising start..

Iceland's president blocks Icesave compensation to UK
Olafur Grimsson refuses to sign bill that would hand £3.4bn to Britain and Netherlands after anger from the Icelandic people

Graeme Wearden guardian.co.uk, Tuesday 5 January 2010 12.17

The president of Iceland has refused to sign a bill to repay more than €3.8bn (£3.4bn) to Britain and the Netherlands following the collapse of the country's Icesave bank in 2008.

Olafur Grimsson threw the long-running issue into fresh uncertainty today when he declared that a national referendum must be held to determine whether or not the legislation is passed.

This is thought to be only the second occasion when the president of Iceland has refused to ratify a bill passed by the country's parliament. Grimsson took the decision after hearing the depth of public anger in Iceland against the bill, which was narrowly approved by MPs on 30 December.

"The cornerstone of Iceland's constitution is that the nation is the highest judge for the validity of law," said Grimsson. "Now the nation has the power and the responsibility in its hands."

The issue centres on the compensation paid to Icesave account holders by the UK and Dutch governments after the online bank, part of Landsbanki, collapsed in October 2008. Both governments have demanded that Iceland repay this debt. However opponents have claimed that Iceland, whose economy has been badly damaged by the financial crisis, cannot afford the repayments.

A petition urging Grimsson not to sign the bill had attracted 62,000 signatures by last night – a fifth of Iceland's population. Opinion polls suggest that a majority of Icelanders are opposed to the deal.

It is not clear when the referendum will be held. Analysts have warned that Iceland's aid payments from the International Monetary Fund may be frozen until the issue is resolved. Supporters of the legislation have also warned that if Iceland does not repay the money then its efforts to join the EU could be badly damaged.

Yesterday, UK chancellor Alistair Darling said it was vital for Iceland's economic future that the Icesave compensation was repaid.

"I would say to people in Iceland I know this is difficult, but you have to realise that the British government had to step in to deal with a very difficult situation with savers in Icelandic banks," Darling told reporters in London.

http://www.guardian.co.uk/business/2010/...mpensation