Poll: Icelanders look set to reject Icesave repayment

City A.M. Reporter
ICELANDERS look set to reject a deal to repay Britain and the Netherlands for debts from a bank crash, denting government hopes of drawing a line under its financial crisis and speed economic recovery.

A referendum will be held on Saturday on an agreement to repay the $5bn (£3bn) debt, run up after the British and Dutch governments repaid depositors who had money in an online account called Icesave. The account was run by one of the three Icelandic banks that collapsed in late 2008.

Yesterday, one survey showed 57 per cent and another poll 55 per cent against the new deal, which the government says is better than one it rejected in March 2010. The readings came after weeks of polls showing support for the deal.

A ‘no’ vote would be a blow for the centre-left coalition, which managed Iceland out of the depths of its financial crisis, but it has not said it will resign if so.

“A ‘no’ vote is a recipe for uncertainty for at least the next one to two years,” Prime Minister Johanna Sigurdardottir said yesterday. “We would have to review and possibly revise the current economic programme.”

Many Icelanders say they are angry that taxpayers have to bail out irresponsible banks.

The government and economists say solving the Icesave issue will help Iceland get back into the markets to fund itself after a financial rescue programme, led by the International Monetary Fund, runs out this year.