Icelanders vote on second Icesave deal

Icelanders vote Saturday in a second referendum on compensating Britain and the Netherlands over the collapse of the Icesave bank in 2008. The deal has been renegotiated after a previous one was rejected in January 2010.

AFP/Halldor Kolbeins

A yes vote would mean that Iceland’s 320,000 citizens would accept a bill of 3.9 billion euros to be paid in stages by 2046 - the 1.3 billion euros owed to the Netherlands at a three per cent interest rate and the rest owed to the UK at 3.3 per cent.

The two countries’ governments compensated their nationals who were caught by the Icesave collapse and demanded that Iceland pay.

A referendum in 2010 rejected an earlier proposal after President Olafur Ragnar Grimsson vetoed it.

The leader of the centre-left government, Johanna Sigurdardottir, has campaigned for a yes vote, which looked likely to be successful until recent opinion polls put the no campaign in the lead.

If the deal is turned down, the country could face up to two years in litigation before the European Free Trade Association court, the equivalent of the European Court of Justice for the European Economic Area, which is made up of Iceland, Liechtenstein and Norway.