Iceland: "We're keeping your money, suckers!"

[Brazen]

Iceland plans vote on bank payout

Iceland's president has announced plans to hold a referendum on the payment of compensation resulting from the collapse of the country's banks.

President Olafur Ragnar Grimsson said he would not sign a controversial bill to repay $5bn lost by UK and Dutch savers in Icesave accounts.

The government has seen strong domestic opposition to the bill.

The Landsbanki bank, which ran the Icesave accounts, collapsed at the height of the banking crisis in 2008.

The money would have gone to the UK and Dutch governments who compensated Icesave holders following the collapse.

The bill gained parliamentary approval in December, but public opposition in Iceland has grown.

On Saturday, the president received a petition against it that had been signed by a quarter of the country's population.

Announcing the decision to hold a referendum on the bill, President Grimmson said that the Icelandic public had the right to choose.

"It is the job of the president of Iceland to make sure the nation's will is answered," he said.

"I have decided... to take the new law to the nation. The referendum will take place as quickly as possible."

BBC Europe business reporter Nigel Cassidy said it was an astonishing decision.

"It really plunges Iceland into a constitutional crisis," he said.

He pointed out that Iceland is having to borrow the $5bn needed for the compensation.

"They don't have the money," he said.

"They are having to borrow it from the IMF to shore up not just this loan but all kinds of other things, so it puts everything up in the air - not just this but further loans from the IMF and even Iceland's chances of joining the European Union."

http://news.bbc.co.uk/1/hi/business/8441312.stm

[Richard Hakluyt]

I think it would be a bad mistake if they vote to default.

[Martinus]

Danegeld 2010. 

[Camerus]

I think it would be a bad mistake if they vote to default.

Yes.  Their mistake lies with entrusting The People to make decisions of this nature.   

[Faeelin]

I am sure the major nations that Iceland would piss off by doing this would never retaliate, so why not?

[Neil]

Is Iceland somehow legally responsible for these accounts?

[HisMajestyBOB]

I think it would be a bad mistake if they vote to default.

[The Minsky Moment]

Is Iceland somehow legally responsible for these accounts?

Its a bit of muddle.  The answer is probably not although it takes a rather crabbed reading of Iceland's treaty commitments to get there.

[Faeelin]

Is Iceland somehow legally responsible for these accounts?

Its a bit of muddle.  The answer is probably not although it takes a rather crabbed reading of Iceland's treaty commitments to get there.

But it does raise the question why Britain and Holland should support Iceland's entry into the EU.

[Grey Fox]

I think it would be a bad mistake if they vote to default.

Iceland is defended by the US Armed Forces.

[Zanza]

Is Iceland somehow legally responsible for these accounts?

Under the European Economic Area rules there must be a state backed guarantee of about 20k Euro per customer if you operate a bank in another country. Iceland's banks operated under these rules so Iceland is liable for these losses. Or at least that's the stance of those countries that have suffered the losses. Iceland probably has a different opinion on that.

[Richard Hakluyt]

I think it would be a bad mistake if they vote to default.

Iceland is defended by the US Armed Forces.

I was thinking of Iceland's credit rating rather than an invasion to seize their vast stocks of fishfingers 

[Pat]

That's too bad, whatever happened to the once proud martial spirit of British sea power?

[The Brain]

Britain has gone from sea power to C power.

[Brazen]

Viking's been quiet. Think he's getting tooled up to repel international armed debt collectors?