A referendum on the so-called ‘Icesave Agreement’ was held in Iceland on Saturday, 9 April. The referendum concerns the validity of Act No. 13/2011, which authorised the Minister of Finance to sign the agreements on “the guarantee of (a) reimbursement from the Depositors’ and Investors’ Guarantee Fund to the United Kingdom and the Netherlands of costs resulting from the payment of minimum guarantees to depositors in branches of Landsbanki Íslands hf. in the United Kingdom and the Netherlands, and (b) payment of remaining balance and interest on these commitments”.
(Icelandic government press release) Although the Act was adopted by 44 of 63 members of the Icelandic parliament Althingi on 16 February 2011, the President of Iceland refused to sign the bill into law on 20 February 2011, referring its validity to a referendum.
The result of the referendum is now clear, the Act has been rejected by the majority of the voters and is therefore repealed. The turnout of the referendum was high and close to 40% voted for and 60% voted against the law.
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The Government of Iceland will do all in its power to secure that the referendum outcome will not have a major impact on Iceland´s economic programme and the fiscal consolidation plan which it has been pursuing with a high degree of success.
The referendum outcome calls not for a readjustment but for a reassessment of macroeconomic assumptions; economic and fiscal plans will now be reviewed so as to take into account the consequences of the referendum outcome. A revised prognosis and budget figures will be available no later than in early May.
The Government further remains committed to the economic programme supported by the IMF, which has been progressing soundly. The next review of the programme by the IMF Executive Board, which is scheduled to take place on April 27th, will be delayed by some weeks. Given the current size of its foreign reserves, Iceland will have no difficulty covering its external maturities in the coming years (including EUR 870 million maturing in 2011 and 2012)
The outcome of the referendum will not affect the commencement of payments by the estate of Landsbanki Íslands hf. to priority claimants (including the British and Dutch authorities), where partial payments are scheduled to take place later this year. These partial payments are expected to cover close to a third of priority (depositor) claims. Moreover, latest figures on its assets indicate that the estate will be able to pay over 90% of claims for deposits.
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On 26 May 2010, the EFTA Surveillance Authority ( ESA), initiated infringement proceedings against Iceland, claiming that Iceland is under an obligation under Directive 94/19 on deposit guarantee schemes to ensure that each depositor does receive the payment foreseen by the Directive in terms of a guarantee for the deposit by issuing a letter of formal notice to the Government. The process had not advanced much, as the outcome of the negotiations and later the referendum were awaited, as a positive vote would have made the legal issue immaterial. Following the no vote of the referendum, the Government will proceed to submit its observations, in line with the strong will of the people of Iceland expressed in the vote. ESA can ultimately bring the matter before the EFTA Court. The average duration of court proceedings before the the EFTA Court is one year.
The Icelandic Government has sought to resolve the Icesave dispute all along in good faith and through negotiations with the British and the Dutch Governments.
The outcome of the referendum can however only be interpreted to the effect that the Icelandic people will not accept a deal requiring Iceland to cover costs related to the Icesave deposit insurance guarantees, unless the legal obligation for doing so is clear.
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The Government will emphasize maintaining economic and financial stability in Iceland, and continuing along the path of reconstruction which it began following the economic collapse of 2008. Significant and indisputable progress has been made towards this end.
Ireland people are brave, I hope that one day people of the world follow Ireland people, corrupts must go for punishment.
“I cannot believe that an real person would be so enthusiastic about the banksters after their financial crimes against humanity wrecked the global economy. ”
I suppose it too much to expect people to understand that this is not about banksters robbing people, but a country who robbed the saving of people and refused to refund it.
For you Americans, imagine you put your money in a FDIC protected bank account, the bank went bust and FDIC said – “You are American, you don’t get your money back, however we have enough money to give to Icelanders”.
That is exactly what this is about.
“The U.S.A and advocates of capitalism ”
Dear marcas, if you are equating the two, the USA has at no point in its history had a system of capitalism. Mixed-economy, at best. And given the events that have transpired in the past few years a strong argument can be made that is is a system of crony capitalism different only in scale from the sort one finds in a banana republic.
Thank you for voting “No” yet again! The equity and debt holders of companies (including banks) should be wiped out for making bad investment decisions. Public money should not be used to support the mismanagement of companies (including banks). The U.S.A and advocates of capitalism have a lot to learn from the people of Iceland. I am sure Iceland will be better off in the long run. Thanks you.
>I am British and I can tell you, we support you!
Speak for yourself. I don’t suppose you feel like paying for the share of the deposit guarantee that falls on me?
The estate of the bankrupt bank Landsbanki will cover the deposit guarantee over icesave, so the British and Dutch taxpayers will not loose any money because of this, they can repay the EU loan taken because of Brown and co bailing out icesave depositors.
What this is about is the EU and IMF trying to force Icelanders to accept responsibility for the bankers mistakes and criminal actions.
It is a matter of principle to fight this injustice, and we will,
in court.
“Brave people of Iceland, do not let yourselves be robbed,”
When you can rob your neighbors instead.
Gratulere Island, you made the right decision, give them nothing, these people in Holland and Britain chose to invest there monies in a foreign internet bank, they took a chance got greedy and lost out. yes it’s not only politicians and bankers who get greedy. i know how you feel we in britain are bailing out the irish with money we’ll never see again, and now they want us to bail out portugal, i’m sure if the british people got a referendum on bailing out the euro countries in trouble, i’m quite sure the vote would be a resounding No.
I am British and I can tell you, we support you!
Do NOT bow down to the TOTALITARIAN EU OR THE BRITISH GOVERNMENT. YOU ARE BETTER OFF OUT OF THE EU.
It’s the rich bankers that have caused this crisis, not the taxpayers of Europe.
I cannot believe that an real person would be so enthusiastic about the banksters after their financial crimes against humanity wrecked the global economy. The posters here scolding the Icelandic people must surely be Goldman Sachs sock puppets working in Bangalore.
GO ICELAND!!!
Well Done Robin*: you are all of us! We need to keep buying expensive cars, spend the weekend in London, by the new iphon, playstation, … and let the others pay for it!
Well done!
*http://en.wikipedia.org/wiki/Robinson_Crusoe
Fair enough. I would guess that the EFTA decision will be in line with their previous comments and will entail the Icelandic state being told to pay up. At which point Iceland gets to decide if it wishes to trade with the EU.
The no vote was driven by those who benefitted during the previous regime and who do not wish to see change. As for the Greeks….well they are virtually bankrupt and should leave the euro zone anyway.
We applaud Iceland citizens referendum NO vote to the UK & Netherland banks compensation scheme.
Why should they have to pay up for the misdeeds of the Icelandic corrupted politicians and fraudulent bankers ?
Did they were participating to their previous profits ?
Banks, Funds & Private Investors who put their cash into EU bankrupt banks & junk Government Bonds, knew they were taking a high risk, as they were receiving interest rates well above the average market rate.
Why should the general public of EU, entirely unconnected to the banking & financial sectors, be expected to compensate Investment Banks, Funds & Private Investors losses or stump up the money that EU politicians spent trying to buy votes?
This is the reason we suggest to all Greek Citizens to follow Iceland’s example, asking for a similar referendum in Greece.
We’re sure that Greek NO vote should be higher than 90%.
Follow us at http://www.stopspeculators.gr.
Dr. Kiriakos Tobras
Iceland people you ARE STRONG, YOU ARE AMAZING!!!!:))
corrupts have to go to the prison!
Cheers from Lisbon,Portugal!
Brave people of Iceland, do not let yourselves be robbed. Better to live a generation of isolation with an intact conscience that allows you to look your children in the eye than to succumb to the EU’s blackmails and endure a life of shame.