The Icesave bill has been the subject of protests in Iceland Iceland's parliament will meet on Friday to plan a referendum on the controversial Icesave bill. Draft legislation drawn up by the government has the referendum scheduled for 20 February. The Icesave bill is up for public vote following the Icelandic president's refusal to approve it. There has been significant public opposition to the legislation, which commits Iceland to repaying $5bn (£3.1bn) to the UK and the Netherlands. Opponents believe the payment terms are too onerous and will hurt Iceland's economic recovery. Government ministers met opposition parties following the president's announcement on Tuesday to discuss how to progress. It is hoped that new laws governing the referendum can be drafted in one day, allowing the vote to go ahead as soon as possible. New ground This will be the first time Iceland has held a referendum of this kind. Previously, laws vetoed by the president have been withdrawn before a public could be held. It is not yet clear what course of action the Icelandic government will take in this case. Icesave's parent bank, Landsbanki, collapsed in 2008 Public opinion in Iceland is believed to be heavily against the bill, which is designed to compensate the UK and Netherlands for money lost in Icelandic banks during the financial crisis. But the government is anxious to see the bill become law, arguing that Iceland needs to be seen to be fulfilling its international obligations. Further bail-out money from the International Monetary Fund - which Iceland's recovery plan relies on - is also dependent on Iceland striking a repayment deal. A vote against the bill in the referendum will see the law revert to an earlier agreement, struck in August and signed by the president. However, that would be unacceptable to the UK, as the old agreement did not guarantee that the full amount owed would be paid back.
Bookmark with: Delicious
Digg
reddit
Facebook
StumbleUpon What are these? E-mail this to a friend Printable version
Ólafur Ragnar GrímssonÓlafur Ragnar Grímsson, President of Iceland, refused to sign a bill to pay US$5 billion (£3.1 billion) to Holland and the UK. Savers in those countries lost out when Icesave's parent bank Landsbanki collapsed and was nationalised alongside Glitnir and Kaupthing. 

The governments of those nations paid out the money individuals had lost and the bill is designed to compensate them. However, the bill is unpopular with the public as 70% of them are said to oppose the measure, which critics have claimed will slow recovery for the Icelandic economy. A petition was given to the President demanding he refuse to sign the bill.

The constitution states that there must now be a public referendum on the issue. The UK has threatened the island nation's 320,000 inhabitants with economic isolation and has requested intervention from the European Union, which is currently considering an application from Iceland for membership. The national assembly has brought forward a planned meeting from the 26th to Friday.

Minister for Foreign Affairs Össur Skarphéðinsson met with every foreign ambassador in Iceland yesterday to discuss the matter. He also met with Mark Flanagan of the International Monetary Fund (IMF), which currently has a deal to loan funds to Iceland. Flanagan later said that so long as the IMF scheme was funded repayment of the Icesave money did not affect this.