Icelandic voters on Saturday overwhelmingly rejected a deal on Iceland repaying the British and Dutch governments for covering the losses of depositors in their countries with money in “Icesave” accounts of a collapsed Icelandic bank. Iceland now needs speedy resumption of formal negotiations on an issue blocking foreign aid to its crisis-hit economy, which contracted around 7.7 percent last year. The government pledged on Sunday to restart talks and swiftly reach a new debt accord with Britain and the Netherlands.
“The outcome is very much as expected. There’s obviously a lot of resentment in Iceland regarding the whole issue and there’s already a better offer on the table from the Dutch and the British,” Gudmundsson said on the sidelines of a meeting at the Bank for International Settlements. “We might have a deal in the coming weeks. If that happens then there will no longer be any question that IMF and Nordic financing will come through.”
The International Monetary Fund and Nordic countries have promised to lend Iceland around $4.5 billion to help it kick-start the economy. But after initial payments, much of the cash is frozen pending resolution of the Icesave debt.
