REYKJAVIK, Iceland — Amid allegations of bullying and profiteering by bigger nations, angry Icelanders are expected to deliver a resounding slap this weekend to plans to use taxpayer money to pay off the tiny island nation’s international debts.
Polls suggest that three quarters of Icelanders are expected to vote “no” in a referendum today on a $5.3 billion deal to compensate Britain and the Netherlands for deposits lost in a collapsed Icelandic bank.
The vote will formalize a public backlash that has become Iceland’s latest stumbling block on the difficult road out of a deep recession, jeopardizing its credit rating, access to much-needed bailout money from the International Monetary Fund and desired entry to the European Union.
At the heart of the dispute is the payment of $3.5 billion to Britain and $1.8 billion to the Netherlands to recompense funds those governments paid out to people with savings in the collapsed Icesave Internet bank.
Britain and the Netherlands offered better terms last week — including a floating interest rate on the debt plus 2.75 percent, representing a significant cut on the 5.5 percent under the original deal hammered out at the end of last year.
