Iceland voters reject payback plan
Initial results show that most Icelandic voters have rejected a £3.49 billion plan to pay off Britain and the Netherlands for debts spawned by the collapse of an Icelandic Internet bank.
With more than 70,000 votes counted, first results returned from six constituencies show 93% of those voters overwhelmingly said "no" in Saturday's referendum, compared to just 1.6% who said "yes."
Voters were considering whether to approve a deal that outlines the payment of £2.3 billion to Britain and £1.18 billion to the Netherlands as compensation for funds that those governments paid out to around 340,000 nationals as compensation after the Icesave internet bank collapsed.
Iceland is still struggling to recover from a deep recession, and many residents object to the tough terms of the repayment plan.
The global financial crisis wreaked political and economic havoc on Iceland, as its banks collapsed within the space of a week in October 2008 and its currency, the krona, plummeted. The Icelandic government was the first to fall as a result of the meltdown.
"This result is no surprise," prime minister Johanna Sigurdardottir said. "Now we must turn to the task of finishing the negotiations on Icesave."
The debt owed to Britain and the Netherlands is a small sum compared with the massive amounts spent to rescue other victims of the global meltdown - £121.7 billion was paid out to keep US insurance giant American International Group alive - but many taxpayers in the country say they cannot afford to pay it.
The deal would require each person to pay around £90 a month for eight years - the equivalent of a quarter of an average four-member family's salary.
But many voters object to the terms of the deal rather than the idea of payment itself.
They also see the deal as an unfair result of their own government's failure to curtail the excessive spending of a handful of bank executives that led the country into its current malaise.
