Iceland to hold referendum on international debt repayments

[Hannah Bell]

Iceland’s Social Democrat-Left Green coalition has confirmed that a referendum on whether to honour the controversial agreement to repay Britain and the Netherlands a total of €3.9 billion by 2024 will be held on March 6.

Late last year, the Icelandic parliament narrowly passed the so-called IceSave bill, which would provide a state guarantee to meet the onerous terms of the agreement, which is designed to repay London and The Hague for compensating hundreds of thousands of British and Dutch citizens who lost savings during the collapse of Iceland’s national bank, Landsbanki.

On January 5 President Ólafur Ragnar Grímsson refused to sign the bill into law, triggering a constitutional mandate that the bill be subjected to a national referendum.

Initial responses to President Grímsson’s decision to submit the agreement to a referendum were universally harsh within the financial establishment. Iceland was denounced as a country unwilling to pay its debts, with the UK Treasury Secretary Lord Myners declaring that if Icelanders voted against the agreement they would “effectively be saying that Iceland does not want to be part of the international financial system.” The collective outrage directed towards Iceland was driven by the concern that no country, no matter how small, should be allowed to challenge the principle that ordinary people must be made to pay for the debts accrued by the speculative practices of the financial elite.

...pressure on Iceland is mounting. The Scandinavian countries, which have pledged a joint $2.5 billion support package, have indicated that future instalments will be withheld until the IceSave dispute is resolved. The IMF, whilst insisting that its support is not tied to IceSave, has delayed its latest “review” of Iceland’s economic progress. IMF director Dominique Strauss-Kahn told a press conference, “If many countries in the international community feel that we should wait with our review of our recovery package for Iceland, then we must do that.”

Without the continued support which the combined $10 billion package provided to Iceland, the danger of state bankruptcy will re-emerge. Further cuts in government spending will have to be launched, and additional pressure will be placed on the battered Krona, which has lost more than half its value against other major currencies since the middle of 2007...

http://www.wsws.org/articles/2010/jan2010/icel-j21.shtml

[malaise]

1. I hope the people of Iceland

come out and tell the IMF et al to fuck off!