REYKJAVIK, Iceland — Still furious over the crippling aftermath of the global financial crisis, Iceland’s voters on Saturday resoundingly rejected a $5.3 billion plan to pay off Britain and the Netherlands for debts spawned by the collapse of an Icelandic Internet bank, according to initial results.
Results returned from about 83,500 ballots — or more than 40 percent of the total ballots expected — counted so far showed that 93 percent of voters said “no” in the referendum, compared with just 1.5 percent who said “yes.” The rest were invalid ballots.
Icelanders were deciding whether to back a plan outlining the payment of $3.5 billion to Britain and $1.8 billion to the Netherlands as compensation for funds that those governments paid to about 340,000 of their citizens who had accounts with the collapsed bank Icesave, an Icelandic Internet bank that offered high interest rates before it failed along with its parent, Landsbanki.
Many voters object to the tough terms of the deal imposed by the debtor countries, not the idea of payment itself.
“This result is no surprise,” said Prime Minister Johanna Sigurdardottir. “Now we need to get on with the task in front of us, namely to finish the negotiations with the Dutch and the British.”
The initial referendum results are indicative of how angry many Icelanders are as the tiny island nation struggles to recover from a deep recession. The global financial crisis wreaked political and economic havoc on Iceland, as its banks collapsed within the space of a week in October 2008 during the credit crunch and its currency, the krona, plummeted. The Icelandic government was the first to fall as a result of the meltdown.
Final results of the referendum are not available until today, though they are expected to be largely in line with the results so far.
The vote could jeopardize Iceland’s credit ratings, making it harder to access much-needed funding to fuel an economic recovery.
Icelandic authorities had recently been in talks with Britain and the Netherlands to come up with a better deal to try to avert the referendum, which was forced by the refusal of Iceland’s president to agree to the so-called Icesave bill.
Last-minute talks between the three countries broke down last week, despite the debtor countries saying they offered better terms for a new deal — including a significant cut on the 5.5 percent interest rate in the original deal hammered out at the end of last year.
The British say their “best and final offer has been turned down,” but Iceland’s Foreign Ministry said late Saturday it remained confident a solution acceptable to all parties can be achieved.
